2020 Tax Returns are Due. Are You at Risk for Being Audited by the IRS?News
Posted in on June 30, 2020
While the Internal Revenue Service (IRS) delayed Tax Day by three months due to the COVID-19 pandemic, Tax Day is finally upon us, and people who waited to file their federal returns can wait no more. For most people, this signifies the end of thinking about taxes for the rest of the year; but, for some, filing their 2020 return will trigger an audit by the IRS.
Are you at risk for being audited? If so, what do you need to know? Here are some important insights from Virginia tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group:
What Factors Can Trigger an IRS Audit?
When facing an IRS audit, one of the first questions you need to answer is: Why are you being audited? What convinced the IRS that it is worth looking into your tax returns as opposed to someone else’s? There are a variety of different factors that can trigger an IRS audit, and understanding why you are being audited will allow you to both (i) build and execute a tailored defense strategy, and (ii) avoid wasting time on potential issues that are not under scrutiny.
Some of the most common issues that trigger IRS audits include:
- Delayed filing of annual income tax returns
- Failure to submit quarterly estimated income tax payments (for independent contractors and business owners)
- Inconsistencies between federal tax returns and other information submitted to the IRS (i.e. if a company reports paying you more than you reported on your return)
- Missing information on federal income tax returns
- Inaccurate calculations of taxable income or federal income tax liability
Of course, this list is by no means exhaustive. The Internal Revenue Code (IRC) is extremely complex, and there are numerous issues that can cause the IRS to question the validity of taxpayers’ returns. In order to determine why you are being audited, you will need to hire an experienced tax lawyer to promptly review your audit letter, your federal income tax returns and all other pertinent documentation.
What Should You Do if the IRS Audits Your 2020 Income Tax Returns?
If the IRS audits your 2020 income tax returns, what should you do? Again, the most important thing you can do is hire an experienced tax lawyer to represent you. The consequences of mishandling an IRS audit can be severe, and you do not want to face penalties unnecessarily. Additional steps to take when facing an IRS audit include:
- Make sure you know your next steps for responding to the audit
- Collect all relevant financial records
- Determine whether there are errors that need to be corrected on your returns
- Develop a strategy for mitigating or avoiding additional liability
- Respond to the audit proactively and with the representation of experienced tax counsel
Contact the Virginia Tax Lawyers at Thorn Law Group
If you need to speak with a lawyer about an IRS audit, we encourage you to contact us promptly. To speak with Virginia tax lawyer Kevin E. Thorn, Managing Partner at Thorn Law Group in confidence as soon as possible, call 703-752-3752, email email@example.com or request an appointment online today.Share This Post