Tax Audit Lawyers in Battle Creek
In Battle Creek, Michigan, 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 Battle Creek, Michigan 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.
After confirming that the letter informing you of your audit is authentic, there are various 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 concerns 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 Battle Creek, Michigan
There are plenty of reasons why Michigan's government, or the federal government, might conduct a tax audit.
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 forthright and diligent in collecting your tax documents, it will probably be a quick, painless process, and you likely don't have anything to worry about.
However if the IRS or other tax agency suspects actual wrongdoing by a Battle Creek, Michigan taxpayer, that's a different matter. There are many different reasons why a government might decide to audit a taxpayer. The most typical one is suspicion that they have underreported their income. If a taxpayer buys a considerable number of expensive luxury items, but reports little or no income on their tax returns, the government will definitely want to know where the money to buy all those things came from, and why it hasn't been declared as taxable income.
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 Battle Creek, Michigan. 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 Battle Creek, Michigan Tax Lawyer Help?
If you are audited in Battle Creek, Michigan, and believe that you have done everything right in collecting and filing your tax return, you probably don't have much to worry about. If there is anything wrong with your tax return, it was probably the result of an honest mistake, which will result in light penalties - typicallyy just an order to pay any back taxes you owe, plus interest.
However, there are times when an audit is conducted to investigate far more serious issues. If you find yourself facing allegations from the IRS of serious wrongdoing, and believe yourself to be innocent, you should pursue the advice of a Battle Creek, Michigan tax attorney immediately.