Tax Audit Lawyers in North Berwick
In North Berwick, 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. Usually, 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 North Berwick, Maine is usually 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 crucial 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 actually being audited.
After confirming that the letter informing you of your audit is authentic, there are several things you can do to prepare for your meeting with the auditor. The first thing you need to do is call them and arrange to meet at a time that's mutually convenient. You should bring any documents and records that the auditor requests, as well as any evidence that you think might be helpful in answering the auditor's questions. The auditor will ask you any questions that he or she believes will clear up whatever issues they have with your return. You should answer all of these questions truthfully, as it is illegal to lie to a tax auditor.
Reasons For a Tax Audit in North Berwick, Maine
There are several reasons why the federal government, or the government of Maine may want to audit a taxpayer.
As mentioned above, an audit can happen simply because a person was chosen for an audit at random. If you are randomly chosen for a tax audit, and you have been honest and diligent in preparing your tax documents, it will probably be a quick, painless process, and you likely don't have anything to worry about.
On the other hand, some taxpayers in North Berwick, Maine are audited for a specific 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.
Likewise, trying to deduct a large percentage of your income is likely to raise suspicions. A tax deduction is a way to reduce one's tax liability by making some of one's income non-taxable. Some common sources of tax deductions in North Berwick, Maine are business expenses and charitable donations. Some people, however, try to include false deductions in their tax returns (trying to deduct charitable donations they never actually gave, for example). A massive 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 North Berwick, Maine Tax Lawyer Help?
If you find yourself being audited in North Berwick, Maine, and are certain that you have done everything right in preparing your taxes, then the audit will probably be over quickly, with no penalties imposed. In cases like this, if anything is found to be wrong with your tax return, it is likely the result of an honest mistake, and the auditor will be aware of this, and will probably give you an opportunity to correct your mistake, without suffering any penalties, with the possible exception of being made to pay interest on any back taxes you owe.
But, in more convoluted cases, chances are you would be well-served by a tax lawyer in North Berwick, Maine, to ensure that your tax audit goes smoothly.