Tax Audit Lawyers in Clarinda
A "tax audit" in Iowa is the process by which the relevant 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, usually 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.
In Clarinda, Iowa, the process of a tax audit is generally not confusing. If you get a letter saying that you have been chosen for an audit, you should still take it seriously, however. The first thing you need to do is confirm that you are actually being audited, because there are fraudsters who impersonate tax collectors, attempting to squeeze money out of innocent victims. When you receive such a letter, you should use the phone book or Internet to find the contact info for the government agency that the letter claims to be from, and contact them. Do not rely on any contact information provided in the letter, as it may direct you to the scammer, who will simply pretend to be a representative of the IRS.
Once you have confirmed that your audit is authentic, you will be required to meet the auditor at an agreed-upon time and place. The auditor will usually inform you about what documents and other evidence you need to take to the meeting. At the meeting, they will ask you a long series of questions about your taxes, to clear up the thing they're uncertain about.
Reasons For a Tax Audit in Clarinda, Iowa
There are many different reasons why the federal government, or the tax authorities of Iowa might decide that a tax audit is warranted in your case.
As discussed earlier, tax audits can be conducted at random. Obviously, the government doesn't have the resources to audit every taxpayer under their jurisdiction. But, by conducting a significant number of random audits each year, taxpayers are, in theory, discouraged from cheating on their taxes, because they know that they might be audited randomly. If you are chosen for a random audit, and have done everything right, you almost certainly have nothing to worry about.
However if the IRS or other tax agency suspects actual wrongdoing by a Clarinda, Iowa taxpayer, that's a different matter. There are many different reasons why a government might decide to audit a taxpayer. The most common one is suspicion that they have underreported their income. If a taxpayer buys a large number of expensive luxury items, but reports little or no income on their tax returns, the government will definitely want to know where the money to buy all those things came from, and why it hasn't been declared as taxable income.
Another common reason for tax audits in Clarinda, Iowa is when a taxpayer claims a large number of deductions. A deduction is simply a legally-allowed 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 Clarinda, Iowa Tax Lawyer Help?
If you find yourself on the business end of a tax audit in Clarinda, Iowa, 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 complex than a simple misunderstanding. In these cases, a good tax attorney in Clarinda, Iowa may be necessary to ensure that the process is as painless as it can possibly be.