Tax Audit Lawyers in Caribou
In Caribou, 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. 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 actual process involved in a tax audit in Caribou, Maine 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 essential 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.
After confirming that the audit you're facing is truly legitimate, there are a few things you can do to prepare. Initially, you should assemble all of the proper 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 list of questions, which you should answer honestly and to the best of your knowledge.
Reasons For a Tax Audit in Caribou, Maine
Tax Audits in Maine can happen for a wide variety of various reasons.
As considered earlier, an audit might happen 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.
Nonetheless, some people in Caribou, Maine are audited because the government suspects that they are underreporting their income. For instance, if you report that you only make ,000 per year, and then go out and buy an expensive sports car, the IRS and state tax authorities are going to want to discover where the money to buy that car came from.
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 Caribou, Maine. 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 Caribou, Maine 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 Caribou, Maine. 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 likely just be made to pay the balance due, plus a slight bit of interest, without incurring any additional penalties.
However, there are some tax audits where the underlying facts are much more complicated than a simple misunderstanding. In these cases, a good tax attorney in Caribou, Maine may be necessary to ensure that the process is as painless as it can possibly be.