Tax Audit in Windsor, 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 process of a Windsor, California tax audit is typically 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 pursue 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.
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 Windsor, California
There are many 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 forthright on your tax returns, it's unlikely that you'll have much to worry about.
But, some Windsor, California tax audits occur for a particular reason. This is typically because the IRS or your local tax authority suspects that you have not reported all of your income on your tax return. For example, suppose that, last year, you bought an expensive new luxury car. But say you only claimed $25,000 in total income that year. As you might imagine, the IRS is going to be quite interested in finding out where the money for that car came from, and, if you have enough money to buy it, why you aren't paying taxes on that money.
Another typical reason for tax audits in Windsor, California is when a taxpayer claims a large number of deductions. A deduction is simply a legally-permitted 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.
Find a Windsor Lawyer that Specializes in Your Area of Need:
How Can A Windsor, California Tax Lawyer Help?
If you find yourself on the business end of a tax audit in Windsor, California, and you are sure that you have reported all of your income, and not claimed any invalid deductions, chances are you were just chosen at random for an audit, and you probably don't have any cause for concern, other than the inconvenience that an audit represents. If you are found to owe any back taxes, and your failure to pay in the past was the result of an honest mistake, you'll likely be afforded a chance to pay any taxes you owe from past years, with the possible addition of interest.
However, there are some tax audits where the underlying facts are much more confusing than a simple misunderstanding. In these cases, a good tax attorney in Windsor, California may be necessary to ensure that the process is as painless as it can possibly be.