Tax Audit Lawyers in Newport
In Newport, Kentucky, a "tax audit" is a procedure in which the IRS or local tax authorities conduct an investigation of a taxpayer's tax filings, looking at them in more detail than they ordinarily do. Typically, they do this because there is something suspicious in the tax return. State and federal tax authorities also do a some number of random audits each year, without necessarily suspecting that an individual auditee has done anything wrong.
The process of a Newport, Kentucky 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. Nonetheless, 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.
Once you have made sure that your audit is indeed real, you can do a few things to get prepared for it. Most notably, you should collect all of the documents that the auditor has asked for, as well as any further 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 Newport, Kentucky
Tax Audits in Kentucky can happen for a wide variety of various reasons.
As mentioned earlier, you might get audited just because you were chosen at random. If this is the case, and you know that your tax return was totally truthful, and have the documentation to back it up, you shouldn't have anything to worry about.
But, some Newport, Kentucky tax audits happen 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 instance, suppose that, last year, you bought an expensive new luxury car. But say you only claimed ,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.
Likewise, attempting to deduct a large percentage of your income is likely to raise suspicions. A tax deduction is a way to lower one's tax liability by making some of one's income non-taxable. Some customary sources of tax deductions in Newport, Kentucky are business expenses and charitable donations. Some people, nonetheless, try to include incorrect deductions in their tax returns (attempting to deduct charitable donations they never truly gave, for example). A large 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 Newport, Kentucky Tax Lawyer Help?
If you experience an audit in Newport, Kentucky, and believe that you have properly reported all of your income on your tax filings, it will probably go fine. And if there is anything wrong with your filings, it was likely the result of an honest mistake, and auditors are generally sensitive to this fact. In such cases, the penalty is typically light. It will probably be little more than a requirement that you pay back taxes and interest.
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 Newport, Kentucky tax attorney as soon as possible, to help make sure that your tax audit goes smoothly.