Audit-by-Mail to Become More Common for Businesses and Individuals
Author: |February 15, 2013
Audit-by-Mail to Become More Common for Businesses and Individuals
Small businesses and affluent individuals have no doubt missed the intense scrutiny the Internal Revenue Service has ramped up recently. It also appears that more thorough examinations are likely in the future, albeit in a different format.
Although the IRS is aggressively trying to close the $385 billion tax gap, it lacks the financial resources and manpower to conduct full-scale audits of those companies and individuals it suspects of skirting U.S. tax law. In response, the agency is instead scrutinizing returns more closely via its audit-by-mail program, according to the Maryland Capital Gazette. The news source notes that tax audits have surged in recent years, and of the 1.5 million audited returns of 2011, roughly 75 percent were correspondence audits completed by mail. In these audits, the IRS generates a mailed notice to taxpayers requesting that they substantiate some information on their returns.
Although these audits may seem expedient, and are typically processed more quickly than in-person examinations, it’s still important that business owners and affluent households treat them with the same level of seriousness that they would another type of IRS inquiry. An improperly worded response or document stream may invite closer scrutiny that could turn into a full-scale audit with IRS officials. In many cases, taxpayers may go into too much detail when answering these questions, which can also lead to additional inquiries. For this reason, it’s important that business owners with significant financial interests rely on a professional who understands the complexity of tax codes and regulations.
Consulting a tax attorney may provide the type of clarification and guidance needed to clear up any issues before they evolve into more serious legal issues.
Audit-by-Mail to Become More Common for Businesses and Individuals
Author:
Small businesses and affluent individuals have no doubt missed the intense scrutiny the Internal Revenue Service has ramped up recently. It also appears that more thorough examinations are likely in the future, albeit in a different format.
Although the IRS is aggressively trying to close the $385 billion tax gap, it lacks the financial resources and manpower to conduct full-scale audits of those companies and individuals it suspects of skirting U.S. tax law. In response, the agency is instead scrutinizing returns more closely via its audit-by-mail program, according to the Maryland Capital Gazette. The news source notes that tax audits have surged in recent years, and of the 1.5 million audited returns of 2011, roughly 75 percent were correspondence audits completed by mail. In these audits, the IRS generates a mailed notice to taxpayers requesting that they substantiate some information on their returns.
Although these audits may seem expedient, and are typically processed more quickly than in-person examinations, it’s still important that business owners and affluent households treat them with the same level of seriousness that they would another type of IRS inquiry. An improperly worded response or document stream may invite closer scrutiny that could turn into a full-scale audit with IRS officials. In many cases, taxpayers may go into too much detail when answering these questions, which can also lead to additional inquiries. For this reason, it’s important that business owners with significant financial interests rely on a professional who understands the complexity of tax codes and regulations.
Consulting a tax attorney may provide the type of clarification and guidance needed to clear up any issues before they evolve into more serious legal issues.
