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IRS Audit

How to File an IRS Audit Reconsideration Request

How to File an IRS Audit Reconsideration Request

By on Dec 20, 2018 in IRS Audit | 0 comments

An audit reconsideration request is the process by which a taxpayer is allowed to dispute the results of a recent audit of their tax return. If you disagree with audit results that prompted the IRS to assess additional taxes to you or a tax credit was reversed, the IRS may very well agree to take a second look at your case.   Do You Qualify for an IRS Audit Reconsideration? You might be eligible to request an audit reconsideration if the following four conditions are met: The tax return in question must already be filed. The taxpayer must have new or additional information that was not part of the original audit process. The taxpayer cannot have already paid the taxes assessed. The taxpayer needs to be able to communicate which portion of the audit is in dispute. How To File If you have determined that you are eligible for an IRS reconsideration request, your next step is to file your request with the IRS. Keep in mind that the IRS is not required to review or accept your request; they have full discretion over how they handle each reconsideration request. You must take the following steps to ensure that the IRS will actually review and potentially accept your information.   Communication:The IRS itself states there is no official form for a request for reconsideration, so it’s up to how you phrase your letter and to include copies of any documents you need to prove your points. Your letter should outline the reason for the reconsideration request, a summary of your situation, documentation. Include details about new information that you would like reviewed since the audit took place. The more detailed information and documentation that you can provide, the better. The IRS does suggest that you include the Disputed Issue Verification Form 12661. Tax Return:You should submit a copy of the submitted tax return in question, even if you have previously included this information. Audit Report:You should also include a copy of the audit report you received if possible. Submission:You should submit the reconsideration request to the tax office that you have been in communication with. Again, there is no special form required for this request, however Form 12661 is...

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Statute of Limitations: What You Need to Know about IRS Audits

Statute of Limitations: What You Need to Know about IRS Audits

By on Jun 13, 2018 in IRS Audit | 0 comments

One of the most common questions that get asked of debt relief counseling firms is whether there is a statute of limitations on Internal Revenue Service (IRS) audits. There is a simple answer to these and then there is a not so simple one. Let’s take a moment to look at this question in better detail and then address how you can protect yourself and your financial future if ever you do have to endure an audit. First Thing’s First…   First the simple answer. In short, yes there is a statute of limitations on how long the IRS has to audit your tax return. That period, known as the ASED or Assessment Statute Expiration Date, is in most cases three years from the tax filing deadline date of the year the return is due for. For example, for 2014 taxes, the filing date was Wednesday, April 15, 2015. With that in mind, the statute of limitations for an audit of that return would be Tuesday, April 17, 2018. So now those returns would be excluded from the ability to be audited in most cases. The important part of that statement is ‘in most cases’ and that’s where we get to the not so simple answer to the question. ASED: What You Need to Know   While the ASED is usually 3 years, this period can be retroactively extended to a period of six years from the date the return is filed (national tax day for individuals or the date of the periodical tax filing date for businesses), if there is a qualifying set of conditions. The qualifying set of conditions most commonly imposed is the discovery of the fact that the taxpayer omitted income from the return in question that was in an amount of greater than 25% of the income total that was reported on the original tax return. If this condition is active then the IRS can assess additional taxes due on the difference in the income true value versus the amount that was reported and thus taxed on the original return. The IRS may also assess additional penalties and interest due on both the original payment due amount and the new taxes due (retroactive to...

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Is There a Statute of Limitations on IRS Audits?

Is There a Statute of Limitations on IRS Audits?

By on May 31, 2018 in Debt Relief, IRS, IRS Audit | 0 comments

An Internal Revenue Service (IRS) audit is an unwelcome thought for most US taxpayers. Even just the idea of an audit can cause serious stress and anxiety regardless of whether you think that your returns are in good order or not.  If you are at all concerned about the potential for an audit, you should know up front how long the IRS has to target your return.  For many years the statute of limitations for an IRS audit was 3 years, but in the last several years, the IRS has added many exceptions that can extend this period from 3 years all the way up to 6 years. Here are some facts you should know about the statute of limitations on audits:   1. If you omit more than 25% of your income on your tax return, then the IRS statute of limitations increases from 3 to 6 years.   2. The IRS also gets six years to audit you if you omitted more than $5,000 of foreign income (If you have interest on an overseas account, for example).   3. If you have never filed your return, the IRS does not have to abide by any statute of limitations so they can audit you anytime.   4. The IRS also has no statute of limitations if you omit certain tax forms. Plus, once an assessment is made, the IRS collection statute is usually 10 years.   5. If the IRS feels like they need more time to determine whether they should complete an audit, they may ask you to sign a form which extends the right to audit by an additional one year.   Successfully Navigating the IRS Audit Process   Audits are serious and complicated and if you are concerned that you might be the subject of one, you might want to consider getting tax support from a reputable tax firm.  Success Tax Relief has helped many taxpayers prepare for and navigate an IRS audit and we can help you as well. We can review your current tax documentation to determine whether you are at risk of an audit, and if you have received a letter regarding an audit, we can manage all communication with the IRS...

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Is There a Statute of Limitations on IRS Audits?

Is There a Statute of Limitations on IRS Audits?

By on Feb 15, 2018 in IRS, IRS Audit, Tax Problems | 0 comments

The changes of getting audited by the Internal Revenue Service (IRS) are actually quite low.  The bottom line is that if you make less than $200,000 a year, you only have about a 1% chance of receiving an audit notice from the government. That means that you have a 99% chance of NOT being audited.  In general, the IRS completes audits as soon as possible after returns are filed. However, there are times when this does not happen and an audit is not pursued by the IRS for an extended period of time. The statute of limitations can really be an important factor when it comes to dealing with the IRS after time has passed. How Far Back Can The IRS Audit You? Generally speaking, the primary statute of limitations for the IRS to notify you of an audit is three years. You should be aware, however, that there are many exceptions to this rule, and the IRS may have MORE than three years, depending on your unique circumstances.  In fact, many exceptions give the IRS up to six years to send notice of their intention to perform an audit. Here are a few of the most common reasons that the IRS can take more than 3 years: Filing an extension actually increases the amount of time that that IRS has to initiate an audit.  So, if you request an extension this year until October, the IRS will have until October 2021 to initiate an audit. The three-year statute of limitation is doubled to six years if the IRS discovers that a taxpayer has omitted an amount from gross income that exceeds 25% of the stated gross income. There is no statute of limitations when an audit pertains to the assessment of tax if a return is false or fraudulent, reflects a willful attempt to evade taxation or when no tax return at all is filed.  The IRS can audit you at any time if they suspect a fraudulent return or if you did not file at all. Keep in mind that not all audits automatically mean that there is a problem with your tax return. The IRS conducts random audits and may only require you to submit very...

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Got an IRS Audit Letter? 5 Steps You Should Take Immediately

Got an IRS Audit Letter? 5 Steps You Should Take Immediately

By on Sep 20, 2017 in IRS, IRS Audit, Tax Deductions | 0 comments

If you are the subject of a tax audit and have recently received a letter from the Internal Revenue Service (IRS), you may likely respond like most Americans, with some element of fear and dread.  The fact is, the audit rate is fairly low (around 1%) if you make below $200,000 a year, but for those Americans who are the subject to an audit, the stress can be very high and you may have questions about what immediate steps you should take to respond.  While getting a letter from the IRS is never what you want to find in your mailbox, it does not have to spell disaster. Here are 5 steps to follow if you have received written correspondence from the IRS: Do not panic:  In the vast majority of audits, the IRS has a simple question about an aspect of your tax return. Remember that audits take a lot of resources for the IRS to complete, so it is in their best interest to keep the process and the outcome as simple as possible.  In the majority of cases, information needs to be provided and verified. Once you send in the information (or money), the audit is complete. A correspondence audit is the more common type of audit and can be handled entirely in writing. Verify the audit is real:  The IRS will not call you or email you to inform you of an audit, this information will only come in writing, in the mail. The IRS will also not ask you to provide personal information and will not demand that you pay in a certain way.  Be on the lookout for fraudulent correspondence claiming that they are the IRS. Carefully read, review, and respond to the letter:  Most audits can be resolved fairly easily as noted above, but the key is to respond as directed by the IRS in a timely manner.  Ignoring the request will not make it go away. If you do not understand what is being asked of you, seek the help of a professional tax service or attorney to give you advice about how best to respond. Keep copies: Once you receive any request from the IRS, keep a clear paper trail...

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4 Types of Debts That Might Cause Your Tax Refund to Be Withheld

4 Types of Debts That Might Cause Your Tax Refund to Be Withheld

By on Jun 22, 2017 in IRS Audit, Tax Problems | 0 comments

  Believe it or not, there are very few reasons why the Internal Revenue Service (IRS) would need to withhold your tax refund. The list is very short, but they all have the same thing in common: they’re federal related. Existing Tax Debt If you currently owe the IRS, then the best thing you can do is pay that debt as soon as possible. It’s understood that sometimes the balance far exceeds the amount that one can afford to pay. This doesn’t mean that you should ignore the bill altogether, because it’s not going away! The IRS is very serious about collecting what is owed to them. Neglecting to pay your IRS tax debt can spiral into serious consequences. If you do not pay, the IRS will start garnishing your paycheck, taking a generous percentage from your paycheck until the total amount of debt is paid for. If this method isn’t quite getting the balance down, the IRS will take further steps to collect what’s owed to them. For instance, if you are in the middle of getting your wages garnished and you end up getting a refund for the next tax-filing season, don’t expect a check, and don’t make any extravagant plans either! Expect that amount to go straight toward your tax debt. Federal Debt Owing a tax debt is just one of ways the IRS can withhold your refund. If you owe any federal agency, the IRS has the right take your annual tax refund to pay that debt. Many taxpayers don’t realize that this also includes federal student loans. You can’t file bankruptcy to get out of paying your student loans. Because it’s a federal loan, be very confident in believing that any outstanding federal debt will be collected. It’s up to you, the taxpayer to choose whether it’s going to be on your terms or theirs, preferably yours! State Taxes Owing state taxes is another reason the IRS can withhold your annual refund. This is something homeowners and business owners need to take into account because this line of business can stretch across several states. Also, state taxes can easily be overlooked while trying to figure out your federal taxes, all the while crossing your...

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