Tax Audit Lawyers in Bar Harbor

In Bar Harbor, Maine, 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. Normally, 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 actual process involved in a tax audit in Bar Harbor, Maine is normally 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 critical 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 really being audited.

After confirming that the audit you're facing is really legitimate, there are a few things you can do to prepare. Initially, 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 Bar Harbor, Maine

Tax Audits in Maine 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 Bar Harbor, Maine tax audits happen for a certain reason. This is normally 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 extremely 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 frequent sources of tax deductions in Bar Harbor, Maine 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 really gave, for example). A wide 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 Bar Harbor, Maine Tax Lawyer Help?

If you are audited in Bar Harbor, Maine, and believe that you have done everything right in gathering and filing your tax return, you likely don't have much to worry about. If there is anything wrong with your tax return, it was likely the result of an honest mistake, which will result in light penalties - normallyy just an order to pay any back taxes you owe, plus interest.

But, in more confusing cases, chances are you would be well-served by a tax lawyer in Bar Harbor, Maine, to ensure that your tax audit goes smoothly.