Tax Audit Lawyers in Central Falls

An "audit" is an administrative proceeding in Central Falls, Rhode Island whereby the IRS, or a local tax-collection agency looks at a person's (or business's) tax filings in more detail than they do in ordinary cases. This is normally done when the tax return has a suspicious discrepancy on it, or if the taxpayer was simply picked at random. It's not uncommon for tax authorities to conduct random audits, providing people with an incentive to be honest on their taxes, knowing that they could be audited at random.

The procedure of being audited in Central Falls, Rhode Island is normally pretty simple. If and when the tax authorities decide to audit you, they'll send you a letter in the mail detailing what's about to happen. If you receive such a letter, it's extremely important that you make sure it's authentic. Sometimes, scam artists will send fake audit notices to people, claiming that they owe the government money. They will then collect their "taxes" and disappear. You should do an internet search for the name of the tax authority that the letter claims to represent, and call them to verify that you are being audited.

After confirming that the letter informing you of your audit is authentic, there are many 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 contentions 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 Central Falls, Rhode Island

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

As discussed earlier, an audit might occur due to a taxpayer being randomly selected. If this happens to you, and you have been straightforward on your tax returns, it's unlikely that you'll have much to worry about.

However if the IRS or other tax agency suspects actual wrongdoing by a Central Falls, Rhode Island taxpayer, that's a different matter. There are many different reasons why a government might decide to audit a taxpayer. The most frequent one is suspicion that they have underreported their income. If a taxpayer buys a massive 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.

Another frequent reason for tax audits in Central Falls, Rhode Island is when a taxpayer claims a large number of deductions. A deduction is simply a legally-authorized subtraction from a person's taxable income. For instance, charitable donations can be deducted from one's income in the full amount of the donation. However, if a person claims a very large number of deductions, to the point that they claim little or no tax liability, the tax authorities are going to take a closer look.

How Can A Central Falls, Rhode Island Tax Lawyer Help?

If you experience an audit in Central Falls, Rhode Island, and believe that you have properly reported all of your income on your tax filings, it will probably go fine. And if there is anything wrong with your filings, it was likely the result of an honest mistake, and auditors are generally sensitive to this fact. In such cases, the penalty is normally light. It will probably be little more than a requirement that you pay back taxes and interest.

However, there are some tax audits where the underlying facts are much more difficult than a simple misunderstanding. In these cases, a good tax attorney in Central Falls, Rhode Island may be necessary to ensure that the process is as painless as it can possibly be.