Tax Audit Lawyers in Willits
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 Willits, 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 importantly, 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 Willits, California
Tax Audits in California can occur for a wide variety of different reasons.
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 straightforward and diligent in gathering your tax documents, it will probably be a quick, painless process, and you likely don't have anything to worry about.
On the other hand, there are also certain reasons why the tax authorities in Willits, 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.
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 frequent sources of tax deductions in Willits, 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 really 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.
How Can A Willits, California Tax Lawyer Help?
If you are audited in Willits, California, and believe that you have done everything right in gathering and filing your tax return, you probably don't have much to worry about. If there is anything wrong with your tax return, it was probably the result of an honest mistake, which will result in light penalties - normallyy just an order to pay any back taxes you owe, plus interest.
But, in more perplexing cases, chances are you would be well-served by a tax lawyer in Willits, California, to ensure that your tax audit goes smoothly.