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San Jose, CA tax compliance attorneyMost people know that paying taxes is not optional. However, sometimes something as simple as a mistake or miscalculation on a tax return can result in a tax compliance issue. When the Internal Revenue Service (IRS) discovers a problem with an individual’s tax return, the first method for contacting the taxpayer is typically a letter through the mail. If the issue is not resolved through the mail, an IRS officer may sit down with the taxpayer in a face-to-face meeting to discuss the compliance concerns. If you have been contacted by the IRS because you have not adequately met your tax obligations, an experienced tax lawyer can help you understand your options and protect your rights.

Make Sure That it Is Actually the IRS Who Is Contacting You

In recent years, there has been an uptick in the number of scammers pretending to be IRS agents. A scammer will typically make a phone call to an unsuspecting taxpayer and impersonate an IRS agent for the purposes of gaining access to personal identifying information or stealing the individual’s money. The IRS very rarely makes phone calls regarding tax issues. If an IRS worker does call you, he or she will not demand immediate payment or ask for credit card details over the phone. According to the IRS’s official website, anyone who receives a suspicious phone call from someone claiming to be with the IRS should hang up and call the IRS directly to discuss any potential compliance issues.

Know What to Expect During an IRS Meeting

The IRS recently announced that it will be increasing the number of revenue officers who make in-person visits to taxpayers. These face-to-face meetings will be focused in communities that have been especially affected by reduced IRS resources. In-person meetings only occur after the IRS makes several attempts to contact the taxpayer via mail. These meetings are typically unannounced. The IRS officer should provide two forms of credentials in order to verify that he or she is indeed an IRS worker. If he or she does not offer identification, you have the right to ask to see these credentials. The officer will then discuss your tax concerns and help you understand your options for resolving the issues.

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San Jose tax evasion defense lawyerIf you are being investigated for tax evasion, you may feel lost, confused, and concerned about the possible penalties you may face. The federal offense of tax evasion occurs when an individual or corporation intentionally and systematically attempts to avoid paying taxes. The offender may falsify documents, fail to report income, or use other illegal tactics to reduce his or her tax obligations. In the last decade, countries around the world have worked together to prevent individuals from concealing income in foreign banks. Tax evasion can include any procedures that allow assets, financial instruments, or revenue to go untaxed or be taxed at a lower rate. The potential penalties for tax evasion can include heavy fines and incarceration. If you are being audited by the IRS, you should know how federal laws may affect you.

Federal Law Regarding Tax Evasion

Tax evasion is a willful act. Simply making mistakes on your tax return will not result in tax evasion charges. Section 7201 of the Internal Revenue Code describes the offense of tax evasion. In order for the IRS and other authorities to prove that a party engaged in tax evasion, they must prove that:

  • The party has an unpaid tax liability.
  • The party intentionally took actions to evade or avoid taxes.
  • The party had “specific intent” to evade his or her duty to pay a certain tax.

Because tax evasion is a criminal matter, prosecutors must prove these elements beyond a reasonable doubt to convict a person for tax evasion.

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San Jose, CA tax law attorney for IRS examinations

Many people have felt the sinking feeling that accompanies receiving a letter from the Internal Revenue Service (IRS). While it may be tempting to simply put the letter in a drawer and forget about it, ignoring the IRS can result in serious consequences. If you are contacted by the IRS and asked to make an office audit appointment, you should be sure to schedule the appointment, contact a tax lawyer for help if you need it, and attend the meeting. If you have already missed an audit meeting, you may wonder about the consequences you may face and what steps you can take to protect yourself.

Voluntary Appointments Versus Required Appointments

When the IRS examines a tax return and decides that the tax filer has misfiled, it may send a letter requesting an appointment. The tax filer may respond to the letter and schedule an appointment, or s/he may choose not to. If you have received a letter and did not schedule the appointment, the IRS has the authority to request a legal summons from a judge and demand that you attend it. If you fail to show up at an appointment that you personally scheduled, you will likely get the chance to reschedule the meeting without any major consequences. However if you were required to be at the appointment because of a legal summons and do not show up, the consequences will be much more serious.

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San Jose tax attorney for IRS auditsIf you are the subject of an Internal Revenue Service (IRS) audit, you likely have many questions about what the auditing process will entail. The IRS may have chosen you for an audit after comparing your tax return against “norms” for comparable returns, or you may have been selected because your tax returns involved transactions with other taxpayers who have been selected for an audit. The IRS manages audits through the mail and/or in-person interviews. As part of the auditing process, the IRS will request access to certain documents and financial information that supports the income and deductions claimed on your tax return.

Common Records Requested by the IRS

The documents and records that the IRS will want to examine during an audit can vary depending on your specific circumstances and the basis for the audit. Commonly, the IRS will request copies of:

  • Receipts: You may be asked to send the IRS receipts proving purchases you have made or money you have received for a product or service.
  • Canceled checks 
  • Bills: The IRS may request bills showing the person or entity receiving payment, the type of service received, and the dates on which you paid them.
  • Loan agreements: You may need to send copies of loan applications or agreements as well as information about how you used money that was loaned to you.
  • Travel logs and tickets: The IRS may want to examine travel plans and dates, mileage information, tickets, and expenses.
  • Theft or loss documents: If you experienced a theft or loss, the IRS will want to see insurance reports describing the loss, police reports, adjustor appraisals, and other relevant information.
  • Medical records
  • Legal documents: The IRS will likely want copies of documents related to property acquisition, tax preparation, divorce settlements, custody agreements, and any civil and criminal cases you have been involved in.

Your Rights During an IRS Audit

It is critical for anyone going through a tax audit to remember that they have certain rights as a taxpayer. In addition to professional and respectful treatment from IRS employees, you also have a right to confidentiality, the right to know why the IRS is auditing you, the right to know how the IRS will use any information gathered, and the right to know what the consequences will be if you do not provide the requested information. Most importantly, you have the right to be represented by a qualified tax lawyer. If you disagree with the IRS’s findings, you have the right to challenge or appeal the IRS auditor’s decision or file a petition with the U.S. Tax Court.

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Posted on in Tax Audits

: San Jose tax audit appeal attorney

If you have gone through an IRS audit and received a letter advising you of its findings, chances are the agency has made determinations about which you are not happy. In some cases, the IRS may determine that you owe back taxes, plus interest and penalties. While some taxpayers may agree with the IRS’s findings and pay the assessed amount, you may believe that the findings are incorrect. In these cases, you should be sure to understand your options for asking the IRS to either reconsider or adjust the determinations.

Appealing the IRS’s Decision

Although audits are best handled by working with the IRS during the audit process, it is also possible to appeal the findings of an audit. However, it is important to keep a very good record of the audit process. This is because during an appeal, the record of the audit will be given more weight than any new information that you may wish to introduce. The auditor’s findings are part of the record, so you should make sure to have all of the supporting documentation to show why you disagree with the decision. 

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