Tax Audit Lawyers in Davenport
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 unexpected audits, where they audit taxpayers at random, without necessarily suspecting them of any wrongdoing.
In Davenport, Iowa, the process of a tax audit is generally not perplexing. 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 just pretend to be a representative of the IRS.
Once you have confirmed that your audit is authentic, you will be obligated to meet the auditor at an agreed-upon time and place. The auditor will usually inform you about what documents and other proof 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 Davenport, Iowa
There are various different reasons why the federal government, or the tax authorities of Iowa might decide that a tax audit is warranted in your case.
A taxpayer can be chosen for an audit at random, even if the tax authorities don't suspect any wrongdoing. The idea behind these random audits is to keep taxpayers on their toes. So, if you are audited for this reason, and know that you've done everything thoroughly in filing your taxes, you will likely be fine.
On the other hand, some taxpayers in Davenport, Iowa are audited for a specific reason, rather than being drawn at random. If the tax authorities believe that you have underreported your income, that is a very frequent reason for a tax audit. For example, if you claim on your tax return that you make ,000 per year, and, in the same year, buy an expensive luxury item, the tax authorities will wonder where you got that extra money, and why you're not paying taxes on it.
If you claim such a large number of deductions that your tax liability is unusually low, you may well be subject to an audit in Davenport, Iowa. A deduction is an allowable reduction in your taxable income, requiring you to pay taxes on a smaller portion of your income. Certain business expenses and charitable donations are common sources of tax deductions. However, some people add invalid deductions to their tax returns to reduce their tax burden. If the IRS is suspicious about your deductions, you should make sure you have proper documentation to back them up.
How Can A Davenport, Iowa Tax Lawyer Help?
If you find yourself being audited in Davenport, Iowa, and are sure that you have done everything right in preparing your taxes, then the audit will likely be over rapidly, with no penalties imposed. In cases like this, if anything is found to be wrong with your tax return, it is likely the result of an honest mistake, and the auditor will be aware of this, and will likely give you an opportunity to correct your mistake, without suffering any penalties, with the possible exception of being made to pay interest on any back taxes you owe.
But, in more perplexing cases, chances are you would be well-served by a tax lawyer in Davenport, Iowa, to ensure that your tax audit goes smoothly.