What is Auditing?
Financial auditing is simply re-examining the financial record of your organization or individual financial records to detect any discrepancies and compliance with standard accounting practice, applicable regulations and laws. External auditors come in to examine the accounting books, financial records and provide expert opinion on these records.
Receiving the white envelope from IRS choosing your tax returns for audit is one of the greatest fears of taxpayers. The primary aim of auditing is to verify or to clarify declared income or legal deductions on tax returns. The U.S has a high taxation system compliance rating on the global index with an estimated compliance rate of about 82% currently.
There are four types of Tax Audit.
- Correspondence Audit. The commonest type which IRS sends a letter in the mail probing for more information about particular part of a tax return.
- Office Audit: Interview at an IRS office.
- Field Audit: Interview at Taxpayer’s home, place of business, or accountant’s office.
- Taxpayer Compliance Measurement Program (TCMP) Audit: This is used to update the data for the IRS’ DIF scores.
Receiving IRS Audit notification
IRS makes contact initially by mail and will provide all contact information and instructions in the letter received. The IRS conducts audits through mail or one-on-one interview to review the records. The fear of the ignorance of tax laws, regulations and the unknown are a major concern too.
For audit by mail, the letter requests additional information about certain items declared on the tax return e.g. income and itemized deductions. The aim of tax audits is to minimize the tax difference due to IRS and what is actually declared.
The auditing process is sometimes riddled with rigors and winning an IRS audit would require due diligence. The taxpayers to be audited are sometimes selected based on suspicious activity in the finances. You will do yourself a lot of good hiring a Certified Public Accountants (CPA) tax professionals to guide you through overcoming the IRS audits unscathed.
Get yourself Tax Professionals (CPAs)
It is very beneficial to get representation from Certified Public Accountants and tax professionals who understand and are experienced about IRS communications. They save you all hassles. Other than documentations such as your Wage Statement (Form W-2), your tax returns is the key documentation for an audit. Consequently, it should be handled accurately and with highest accounting standards. Which is why you require expert tax advisors providing superior financial services at Gavrilov & Co with competitively affordable rates. Accountants at Gavrilov & Co. are one of the most effective that can handle communications with IRS. Gavrilov & Co. are confident tax professionals in dealing with the IRS and your worries would all be sorted out properly.
Maintain and provide necessary financial records, books and information
You should limit the scope of the IRS audit by providing all necessary documentations and information to support facts being probed. Experienced tax professionals can help identify and transmit the necessary documents. Eliminate the odds of one-on-one audit by providing information in relation to the returns declared.
Keeping proper documentations is also key and a safeguard to winning an IRS audit. Do not prepare your own tax returns personally, it is not your profession and tax experts such as CPAs at Gavrilov & Co. can prepare, file and defend your tax returns on your behalf. They also maintain records on your behalf, ensuring proper records and compliance.
Tax returns determine the amount of taxes to be remitted and tax professionals can help determine how best to avoid unnecessary taxation such as double taxation and tax refunds. People in higher tax brackets are more prone to a tax audit and one of the immense benefits of hiring the excellent Tax professionals at Gavrilov & Co. is their superior ability to help you identify and lay claim to tax refunds with outstanding tax services, booking keeping and payroll.
Your taxes deserve due diligence! Let our tax Advisors and CPAs securely maintain your financial books, records and audit with IRS on your behalf.
ALSO MAKE SURE TO IMBIBE THE FOLLOWING PRACTICES:
- Audit-proof your taxes: Audit-proofing eliminates the potential for penalties
- Monitor your Individual Master File (IMF): Freedom of Information Act gives you access to IRS Records. You can also get advance notice of a potential audit
- Ensure your team representative is not intimidated by IRS agents.
Remember! Always keep proper documentation and make sure the Tax advisors keep proper documentations on your behalf, in case the need may arise.