Any kind of tax audit means an examination of all your tax returns to be done by the IRAS for verifying that the income of your company and deductibles are all accurate. Therefore, after conducting a tax audit, your company’s tax documentation will be fully combed by a certain fine-tooth comb and verify closely that all your account details are accurate.
JL Accounts have a qualified and experienced team to serve all types of companies and can offer advice related to tax audit matters and other finance-related issues.
Even if your return appears to be practically faultless, you may be audited at random. According to data, around 13,450 returns were randomly audited in 2013, accounting for approximately.009percentage of all qualified returns. That is a slim possibility, but it is better than the chances of winning the recent casino jackpot.
The chances that you will be audited are extremely low
The chances of being audited by the IRS can be around one in 143 for the ordinary businessperson. If your income lies in the middle or lower income bracket and your taxes are simple, your chances of being audited are considerably smaller. The odds have also been lowered because of recent personnel layoffs at the IRS offices.
A tax audit will not mean you are in trouble
While it is true that the IRS can audit persons if they believe they have committed a crime, this is not always the case. Every year, the IRS audits a part of the taxpaying public. It is possible that you will get chosen solely by luck.
In other circumstances, something on a person’s tax return may place them in danger of an audit. Alternatively, the information provided on their tax return does not match the information obtained by the IRS from another source.
Furthermore, taxpayers with higher income have more chances to be audited. Higher-income individuals not only have more complicated returns, but they also tend to owe the IRS more money.
Generally, IRS audits only check the last 2 or 3 years
You may begin to worry about what would happen in case the IRS audited any old return after filing many income tax returns. Were you able to locate your information? Could you recall any specifics?
You do not have to be concerned about it happening. Most tax audits, according to the IRS, are for returns filed only within the last 3 years. They may add extra years if they discover a significant inaccuracy. Even yet, they rarely go back further than six years.
You can hire any professional for helping you
You have the right to ask for a representative of a tax advisory or any tax investigation adviser in Singapore, in addition to addressing your tax filing, offenses, or any other type of inquiry on your own.
You can still assemble your information and represent yourself if the IRAS seeks a field audit. With the assistance of an experienced tax professional, though, you may feel more at ease. You can benefit from the years of experience that a professional has.
There will be less chance to make any filing or documentation problems if you hire someone who is familiar and experienced with the system.
Don’t panic if the IRS audits you
Some IRS tax audits may not be at all what you would expect. The IRS may just require more documentation or a response for a certain item. Respond as soon as possible and then move on.
If you are agreeable to doing so, you can collect your information and try to represent yourself if the IRS wants any field audit. You also have the option of selecting someone to assist you.
While you are subjected to an audit, then you also have certain rights. You must ask as you have got the right to know the reason for asking for information by the IRS and you may also create a full audio recording of your interview with notice, and ensure that you are not interrogated over almost the same material multiple times.
You can reduce the chances of an audit
A few elements on your tax return can draw the notice of IRS and make you more likely to face a tax audit. Consider the following scenario:
- Business losses that you show because of your hobbies
- Credits and deductions for unusual amounts
- Large casualty losses
- Business deductions
Regardless of these circumstances, do not let fear of a tax audit deter you from obtaining deductions you are entitled to. Just keep in mind that the IRS may investigate certain products. If this happens, make sure your records are in good form.
Returns that are error-free are less likely to be further audited by the IRS. You might choose to take benefit of the offer during the filing procedure. If the IRS audits you in future, an experienced audit professional can answer on your behalf IRS and state taxation authorities queries.
