Tax Audit Lawyers in Covington

An "audit" is an administrative proceeding in Covington, Tennessee 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 typically 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 process of a Covington, Tennessee tax audit is typically pretty straightforward. If and when you are faced with a tax audit, you'll receive a letter from the IRS, or its state equivalent, telling you that you're being audited. Nonetheless, you should not assume that this letter is authentic, because con artists will sometimes send fake audit letters to squeeze money out of innocent taxpayers. You should pursue independent confirmation of the letter's authenticity by searching the Internet for the name of the government agency in question, and contact them for more information.

Once you have confirmed that your audit is authentic, you will be obligated to meet the auditor at an agreed-upon time and place. The auditor will typically inform you about what documents and other proof you need to take to the meeting. At the meeting, they will ask you a long series of questions about your taxes, to clear up the thing they're uncertain about.

Reasons For a Tax Audit in Covington, Tennessee

There are numerous reasons why the federal government, or the government of Tennessee may want to audit a taxpayer.

As considered earlier, tax audits can be conducted at random. Apparently, the government doesn't have the resources to audit every taxpayer under their jurisdiction. But, by conducting a substantial 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 definately have nothing to worry about.

But, some Covington, Tennessee tax audits happen for a particular reason. This is typically because the IRS or your local tax authority suspects that you have not reported all of your income on your tax return. For instance, suppose that, last year, you bought an expensive new luxury car. But say you only claimed ,000 in total income that year. As you might imagine, the IRS is going to be quite interested in finding out where the money for that car came from, and, if you have enough money to buy it, why you aren't paying taxes on that money.

Likewise, attempting to deduct a large percentage of your income is likely to raise suspicions. A tax deduction is a way to lower one's tax liability by making some of one's income non-taxable. Some customary sources of tax deductions in Covington, Tennessee are business expenses and charitable donations. Some people, nonetheless, try to include incorrect deductions in their tax returns (attempting to deduct charitable donations they never truly gave, for example). A large 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 Covington, Tennessee Tax Lawyer Help?

If you are audited in Covington, Tennessee, and believe that you have done everything right in collecting and filing your tax return, you likely don't have much to worry about. If there is anything wrong with your tax return, it was likely 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.

But, there are some tax audits that are far more confusing 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 Covington, Tennessee tax attorney as soon as possible, to help make sure that your tax audit goes smoothly.