Tax Audit Lawyers in Merced
A "tax audit" in California is the process by which the appropriate 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, normally 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 process of a Merced, California tax audit is normally pretty straightforward. If and when you are faced with a tax audit, you'll receive a letter from the IRS, or its state equivalent, telling you that you're being audited. However, you should not assume that this letter is authentic, because con artists will sometimes send fake audit letters to squeeze money out of innocent taxpayers. You should obtain independent confirmation of the letter's authenticity by searching the Internet for the name of the government agency in question, and contact them for more information.
Once you have made sure that your audit is indeed real, you can do a few things to get ready for it. Most vitally, you should gather all of the documents that the auditor has asked for, as well as any additional documents and evidence that you think might help clear up any confusion about your tax return. You should bring these to the meeting with the auditor, and truthfully (to the best of your knowledge) answer all of the questions that the auditor asks.
Reasons For a Tax Audit in Merced, California
There are several reasons why the federal government, or the government of California may want to audit a taxpayer.
As discussed earlier, an audit might occur due to a taxpayer being randomly selected. If this happens to you, and you have been straightforward on your tax returns, it's unlikely that you'll have much to worry about.
On the other hand, there are also certain reasons why the tax authorities in Merced, California might want to conduct a tax audit. The most frequent reason for a tax audit is suspicion that a taxpayer has not reported all of the income they earned in a given year. This suspicion often arises when a taxpayer buys a massive number of expensive luxury items, but only claims a small amount of income on their tax return. Obviously, the tax man will be extremely interested in learning where someone who is claiming a minimum-wage level income on their taxes got the money to buy a sports car.
Another frequent reason for tax audits in Merced, California is when a taxpayer claims a large number of deductions. A deduction is simply a legally-authorized subtraction from a person's taxable income. For instance, charitable donations can be deducted from one's income in the full amount of the donation. However, if a person claims a very large number of deductions, to the point that they claim little or no tax liability, the tax authorities are going to take a closer look.
How Can A Merced, California Tax Lawyer Help?
If you end up being tax audited, and you believe that you have not engaged in any wrongdoing, it's likely that you've been chosen randomly for an audit in Merced, California. If this is the case, you shouldn't be worried. If you are found to have made a mistake on a past tax return, and paid less than you owed, you'll probably just be made to pay the balance due, plus a minimal bit of interest, without incurring any additional penalties.
But, in more difficult cases, chances are you would be well-served by a tax lawyer in Merced, California, to ensure that your tax audit goes smoothly.