Tax Audit Lawyers in Norwood

A "tax audit" is a procedure in Norwood, New Jersey where the tax authorities investigate a taxpayer's (whether the taxpayer is a person or corporation) filings when it looks like there's some kind of discrepancy. However, many state and federal tax audits are the result of random selection, when the authorities don't necessarily think that a taxpayer has deliberately evaded their taxes.

The actual procedure involved in a tax audit in Norwood, New Jersey 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.

Once you receive the letter, and confirm its authenticity, you will have to meet with an auditor at the time and place specified 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 Norwood, New Jersey

There are several different reasons why the federal government, or the tax authorities of New Jersey might decide that a tax audit is warranted in your case.

As discussed earlier, tax audits can be conducted at random. Obviously, the government doesn't have the resources to audit every taxpayer under their jurisdiction. But, by conducting a significant number of random audits each year, taxpayers are, in theory, discouraged from cheating on their taxes, because they know that they might be audited randomly. If you are chosen for a random audit, and have done everything right, you almost certainly have nothing to worry about.

However if the IRS or other tax agency suspects actual wrongdoing by a Norwood, New Jersey taxpayer, that's a different matter. There are several different reasons why a government might decide to audit a taxpayer. The most common one is suspicion that they have underreported their income. If a taxpayer buys a large 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.

It is also common to be audited in Norwood, New Jersey if you claim a massive number of deductions. A tax deduction is simply a legal subtraction from one's taxable income. Several different expenses, including charitable donations, interest paid on mortgages, and others, are deductible from one's taxes. If you claim so many deductions that you have negated almost all of your tax liability, you can bet that the government is going to be suspicious.

How Can A Norwood, New Jersey Tax Lawyer Help?

If you are audited in Norwood, New Jersey, and believe that you have done everything right in preparing 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 - usuallyy just an order to pay any back taxes you owe, plus interest.

But, there are some tax audits that are far more perplexing and serious than a tax return having a few more deductions than usual. If this is the situation you're in, you should contact a Norwood, New Jersey tax attorney as soon as possible, to help make sure that your tax audit goes smoothly.