Filing taxes can be a pain. No one wants to go through this process every year, and no one wants to pay more than they think they should have to. There are certain things some Connecticut residents may do when completing their taxes to help lower their tax liability. Unfortunately, some of those things may increase one's odds of being audited. What does the Internal Revenue Service look for when deciding who to audit?
Have you ever received one or more phone calls supposedly from the Internal Revenue Service? Most of these calls have to do with being past due on tax payments rather than tax audits, but they are scary nonetheless. If you do receive phone calls from someone claiming to work for the IRS or an automated message saying you have a tax problem, you're best just hanging up, as the IRS does not make it a habit of contacting Connecticut taxpayers that way.
No one wants to get picked for a tax audit, but it happens. The Internal Revenue Service not only looks for red flags on tax forms that would warrant tax audits, but it also randomly selects Connecticut residents to put through the wringer every year, just because they can. When an audit is complete, some people may feel that they have to live with the results, but the truth is, it may be possible to fight the results by filing an appeal.
When one leaves the workforce to retire, one would think that taxes would get easier. Unfortunately, they do not. There are a number of reasons why retirees in Connecticut may face tax audits.
Aside from paying taxes, the one thing just about everyone dreads is being picked for an audit. Tax audits, under certain circumstances, can have significant consequences. However, many people who are picked for audits really do not have a lot to worry about. The biggest cause of worry for most Connecticut residents really comes from not knowing how audits work.
The hope every Connecticut resident has when filing taxes is that they will not hear anything but good news from the Internal Revenue Service. However, months or even years down the line, there are an unfortunate few who receive letters stating they have been selected for tax audits. Audit is a word that can strike fear into anyone's heart. Not to worry, though; when it happens, taxpayers are protected by the Taxpayer Bill of Rights.
Connecticut residents who receive word that they are being audited by the Internal Revenue Service may have a lot of questions and concerns. This is completely understandable, as it can be a frightening thing if one has never been through it before. This week's column will address some common questions people may have about tax audits.
Tax day has once again come and gone. Many Connecticut residents were able to get their returns and -- if applicable -- payments submitted on time. Then there are those who may have needed to file extensions so that they have more time to figure things out. No matter what side of the fence one finds him or herself, those who did or do any of the following things may face tax audits in the future.
Those who seek professional help during tax season may believe that their tax preparer is the only person they will need to turn to in the event of an audit. While it is the tax preparer's job to defend whatever he or she did, resulting in the audit, there may be reason to seek the assistance of an experienced tax attorney. Here are a couple reasons why Connecticut residents -- particularly those who are dealing with business tax issues -- who are facing tax audits may want to think about seeking help from legal counsel.
Every year, you've completed your taxes to your best ability. You've either taken on the role of tax preparer yourself or you turned to a trusted individual to get everything filed for you. Your returns were accepted with no problem, and you paid or received a refund as expected. Then it happens -- you receive notice that you are being audited for a tax return submitted two years ago. You and other Connecticut residents like you who are facing tax audits can seek help to get through it unscathed.