Connecticut residents should understand audits

| Jul 14, 2017 | Audits

The hardworking residents of Danbury, Connecticut (Fairfield County), work hard and pay their taxes. However, there may be instances when taxes are miscalculated or otherwise inadvertently underpaid. If the Internal Revenue Service (IRS) feels that there is a discrepancy between the amount that was due in one or more years and the amount that was paid for those years, they may launch an audit. For that reason, it is important to know some details about the audit process.

Audits happen based on information that the IRS has about your tax returns and income. The IRS gets that information from a range of sources, including other audits, information from the federal government, information from a state agency or information from another state’s revenue department.

An audit does not necessarily mean that you will have to pay more taxes. A point of an audit is to determine whether or not you need to pay more taxes, not to presume that you do at the beginning of the audit process. Indeed, that process may result in you getting a refund if it determines that you overpaid your taxes.

Audits typically involve in-person meetings, but those can often be arranged at mutually convenient times and places. For example, they can take places at IRS offices, at your place or business or at the office of your accountant or attorney, in which case your accountant or attorney can advise you before, during and after the meeting. That can be very advisable if the issues involved are complex. In some cases, audits may be conducted by mail.

There are statutes of limitations that limit the amount of time that the IRS has to conduct an audit, just like there are statutes of limitations that limit the amount of time that taxpayers have to amend returns. If the IRS needs more time to conduct an audit, they will ask the taxpayer to sign a waiver that will extend the amount of time for it. Your attorney can advise you of your rights in that regard.

CATEGORIES
ARCHIVES
RECENT POSTS