Tax Audit in Anderson, California
A "tax audit" in California is the process by which the proper tax authorities (either the IRS, at the federal level, or its state equivalent) investigate a tax filing in more detail than they do for ordinary filings, typically because there appears to be a discrepancy, or some other suspicious item, in somebody's tax returns. However, the IRS (and state tax authorities) sometimes do rounds of random audits, where they audit taxpayers at random, without necessarily suspecting them of any wrongdoing.
The procedure of being audited in Anderson, California is typically pretty simple. If and when the tax authorities decide to audit you, they'll send you a letter in the mail detailing what's about to happen. If you receive such a letter, it's extremely important that you make sure it's authentic. Sometimes, scam artists will send fake audit notices to people, claiming that they owe the government money. They will then collect their "taxes" and disappear. You should do an internet search for the name of the tax authority that the letter claims to represent, and call them to verify that you are being audited.
After confirming that the letter informing you of your audit is authentic, there are various things you can do to prepare for your meeting with the auditor. The first thing you need to do is call them and arrange to meet at a time that's mutually convenient. You should bring any documents and records that the auditor requests, as well as any evidence that you think might be helpful in answering the auditor's questions. The auditor will ask you any questions that he or she believes will clear up whatever concerns they have with your return. You should answer all of these questions truthfully, as it is illegal to lie to a tax auditor.
Reasons For a Tax Audit in Anderson, California
A tax audit in California can be performed for almost any reason at all
As mentioned above, an audit can happen simply because a person was chosen for an audit at random. If you are randomly chosen for a tax audit, and you have been forthright and diligent in collecting your tax documents, it will probably be a quick, painless process, and you likely don't have anything to worry about.
However, some people in Anderson, California are audited because the government suspects that they are underreporting their income. For example, if you report that you only make $20,000 per year, and then go out and buy an expensive sports car, the IRS and state tax authorities are going to want to know where the money to buy that car came from.
Likewise, trying to deduct a large percentage of your income is likely to raise suspicions. A tax deduction is a way to reduce one's tax liability by making some of one's income non-taxable. Some customary sources of tax deductions in Anderson, California are business expenses and charitable donations. Some people, however, try to include false deductions in their tax returns (trying to deduct charitable donations they never truly gave, for example). A huge number of deductions will be highly suspicious to the tax authorities, and they will want to see evidence to support every deduction you claim, if you're audited.
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How Can A Anderson, California Tax Lawyer Help?
If you experience an audit in Anderson, California, and believe that you have properly reported all of your income on your tax filings, it will probably go fine. And if there is anything wrong with your filings, it was likely the result of an honest mistake, and auditors are generally sensitive to this fact. In such cases, the penalty is typically light. It will probably be little more than a requirement that you pay back taxes and interest.
But, there are some tax audits that are far more complicated and serious than a tax return having a few more deductions than usual. If this is the situation you're in, you should contact a Anderson, California tax attorney as soon as possible, to help make sure that your tax audit goes smoothly.