Tax Audit Lawyers in Maquoketa
A "tax audit" in Iowa 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.
In Maquoketa, Iowa, the process of a tax audit is typically not convoluted. 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 really 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.
After confirming that the audit you're facing is really legitimate, there are a few things you can do to prepare. First, you should assemble all of the appropriate documents you have in your possession. This should include your tax return, W-2 forms, and records of any expenses that you claim as deductions. You should bring these documents, and any others that the auditor requests, to the meeting. At the meeting, the auditor will ask you a number of questions, which you should answer honestly and to the best of your knowledge.
Reasons For a Tax Audit in Maquoketa, Iowa
There are several reasons why the federal government, or the government of Iowa may want to audit a taxpayer.
As discussed earlier, tax audits can be conducted at random. Evidently, the government doesn't have the resources to audit every taxpayer under their jurisdiction. But, by conducting a considerable 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.
On the other hand, some taxpayers in Maquoketa, Iowa are audited for a certain reason, rather than being drawn at random. If the tax authorities believe that you have underreported your income, that is a very recognized reason for a tax audit. For instance, if you claim on your tax return that you make ,000 per year, and, in the same year, purchase an expensive luxury item, the tax authorities will wonder where you got that extra money, and why you're not paying taxes on it.
Another frequent reason for tax audits in Maquoketa, Iowa 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 Maquoketa, Iowa 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 Maquoketa, Iowa. 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, there are some tax audits that are far more convoluted and serious than a tax return having a few more deductions than usual. If this is the situation you're in, you should contact a Maquoketa, Iowa tax attorney as soon as possible, to help make sure that your tax audit goes smoothly.