Being audited by the Internal Revenue Service (IRS) is a lot like having your math teacher from high school tell you to prove that you’ve come up with the right answer on a test. If you can’t prove it, you fail. Sadly, many taxpayers who […]
Let’s face it, there’s always an area or room in our homes that needs a makeover or could use an update. Due to financial limitations, however, many people choose to leave the living space as is or delay the prospect of pursuing a home improvement […]
You still can’t believe that the Internal Revenue Service (IRS) has decided to audit your tax return. In addition to feeling nervous about the outcome of the audit, you feel confused about what the audit process actually entails. The most recent blog, Part 1 of a three-part series, discussed why the IRS may be auditing you, based on tax audit reviews. In this article, Part 2 of this three-part series, you’ll learn firsthand what an IRS audit actually involves.
The IRS will manage your audit either via a face-to-face interview or by mail to look at your tax records. However, the agency will first provide you with instructions for the audit by mail.
If the IRS chooses to audit you by mail, the agency will ask you for extra information regarding specific items on your tax return, like your itemized deductions, income, or expenses. However, if you don’t want to mail the IRS a large number of documents or books, you can ask the IRS for an in-person audit.
Note, though, that the IRS does accept electronic records generated via tax software in some cases. The agency might request these records instead of, or along with, other kinds of records. Your auditor will tell you exactly what he or she will accept.
As a general rule of thumb, the records that the IRS may ask you to provide as part of your audit include receipts, canceled checks, loan agreements, and travel tickets. Other documents you may have to furnish include bills, legal papers, travel diaries/logs, dental/medical records, and employment documents depending on your particular situation. According to federal law, you must maintain at least the past three years’ worth of records in case you are audited. Certain types of records, such as those related to a home or rental property, should be retained indefinitely.
In Part 3 of this series on IRS audits, we will discuss what will happen at the end of your IRS audit.
Whether your business operates online or not there is absolutely no underestimating the power of your online reputation, and this is why hiring reputation management consultants will always make sense for your business. We have a change in attitudes from so many business owners around […]
Tracy Morgan is a famous American actor and comedian. Forbes has stated that Morgan’s net worth is an incredible $50 million. Tracy Morgan was born on November 10th, 1968. The celebrity came from humble beginnings. Therefore, Morgan’s career has become an inspiration to anyone who […]