Tax Audit Lawyers in Somerville
In Somerville, Massachusetts, 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 certain number of random audits each year, without necessarily suspecting that an individual auditee has done anything wrong.
The actual procedure involved in a tax audit in Somerville, Massachusetts is typically fairly straightforward. If you hare chosen for an audit, you will receive a letter in the mail telling you as much. Before responding, it's important for you to make sure that the letter is authentic, because there are scammers who send fake audit letters to innocent victims, in an attempt to extort money out of them. You should search the Internet for the name of the organization that the letter claims to represent, and call them using the contact information on their website, and confirm that you are truly being audited.
Once you receive the letter, and confirm its authenticity, you will have to meet with an auditor at the time and place stated in the letter, and subsequent communications with the auditor. The auditor will tell you what documents and records you need to bring to the meeting. They will then ask you some questions to clear up whatever discrepancy they found in your tax return.
Reasons For a Tax Audit in Somerville, Massachusetts
Tax Audits in Massachusetts can occur for a wide variety of different reasons.
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 Somerville, Massachusetts 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 ,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.
If you claim such a considerable number of deductions that your tax liability is unusually low, you may well be subject to an audit in Somerville, Massachusetts. A deduction is an allowable reduction in your taxable income, requiring you to pay taxes on a smaller portion of your income. Specific business expenses and charitable donations are customary 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 appropriate documentation to back them up.
How Can A Somerville, Massachusetts Tax Lawyer Help?
If you experience an audit in Somerville, Massachusetts, 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.
However, if the situation is more confusing, you may need to hire a Somerville, Massachusetts tax attorney. A tax attorney can help you through your audit, and make sure it goes as smoothly as possible.