Terry White CPA
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Tax Audits
A tax audit is an examination of a tax return by a government revenue collections agency.
The best known collections agency is the Internal Revenue Service. Some, but not all of the states
have their own agencies that perform tax audits.
What is the Purpose of a Tax Audit?
The purpose of a tax audit is to determine if the items on a tax return are accurate and supported by proper records. A tax audit can produce a finding that additional tax is owed, no tax is owed, or that the taxpayer is entitled to a refund.
Why Are Specific Tax Returns Selected for Audit?
Some tax returns are selected at random to encourage members of the general public to prepare their tax returns properly. Some returns are selected because they contain a specific deduction or schedule that is often contains incorrect information. Some returns are selected because certain types of deductions are larger that would be expected for a given community. Some tax payers have a history of incorrectly reporting their income and are audited on this basis. People with large amounts of income are audited more often than people who have little income.
Where are Audits Conducted?
Some audits are conducted by mail. The auditor requests certain information. You mail that information to the auditor. The auditor makes a decision and sends you the results.
More complex audits are held at the auditors office. You are asked to come to the auditor's office
on a certain day and time. You are asked to bring records that the auditor requests. The auditor asks you questions and examines the records that you have brought. The auditor then decides if you owe more tax, no tax or are entitled to a refund.
Sometimes the auditor will go to the taxpayer's place of business to conduct an audit. These audits normally involve corporation, partnership or other types of business tax returns.
What I Can Do For You.
Office and business location audits can be complex. Such audits often result in large amounts of additional tax being assessed. It is highly advisable to have a tax professional to represent you at such audits. If you live in southern California, I can represent you at these types of audits. If you live in other areas, or other states, I can advise you as to how to deal with the auditor, or recommend that you obtain the services of a qualified representative.
Do You Charge for Representing Me at an Audit?
My fees for audit representation depend on many factors. These include the complexity of your tax return, the complexity of the tax issues that are involved and the quality of records that are available for example. I must examine your case before I can quote you a fee.
