Both state and federal laws are clear in stating that individuals and businesses that earn an income must pay a percentage of taxes to the government. From the federal perspective, the Internal Revenue Service (IRS) has broad powers to collect these funds. If the IRS determines that you have not provided proper payment in the form of taxes, it may initiate an audit. In other scenarios, your audit is the product of a random selection. In either case, you can protect your finances with a dependable tax attorney.
A Rockville IRS tax audit and appeals lawyer from Pontius Tax Law might be able to help you by explaining the tax audit process and assisting in the gathering and submission of financial data. If an audit results in an IRS determination that more money is owed, and you believe this determination was made in error, an attorney could work to pursue an appeal.
Why Would the IRS Initiate a Tax Audit?
The function of the IRS is to ensure that all taxpayers provide proper tax payments to the government. This includes an examination of tax returns for correct payment amounts as well as the proper use of deductions. If the IRS believes that an underpayment has occurred, it may select a tax return for an audit. In other situations, a tax audit may occur at random. A taxpayer will be told of an impending audit through the mail, which will include information on how to request more information.
If the IRS determines that an underpayment has occurred, it can ask for an immediate payment. A Rockville tax audit lawyer could assist in guiding someone through the audit process. This could include assembling all the relevant documents to mail into the IRS or to represent the taxpayer at a face-to-face meeting.
Types of Tax Audits
A lawyer could help someone with a correspondence tax audit after they received an IRS Notice CP2000 with proposed changes of $25,000 or more of tax. This could happen with something like unreported stock sales or an unreported sale of a primary residence without IRC Section 121 deduction. There are also in-person audits where the taxpayer is in a sensitive “eggshell” situation that poses a risk of criminal investigation. This usually occurs when they understated income or overstated expenses by at least $50,000. In addition, help is available if an employer is being audited for employee misclassification errors.
Can a Taxpayer Appeal the Outcome of a Tax Audit?
While it is true that most people will need to pay taxes to the government as a matter of law, this does not mean that the IRS can act outside of the scope of its authority. Specifically, the Taxpayer Bill of Rights § 5 states that all taxpayers retain a right of appeal following an IRS decision. This even applies to cases involving an audit.
An appeal might be necessary when the taxpayer believes the IRS’s determination is incorrect and there is more than $50,000 of tax at issue. Various options exist to contest this finding. Taxpayers can request an appeal with the IRS Independent Office of Appeals for federal cases or the Comptroller’s Office of Hearings and Appeals for Maryland cases. In addition, specialized tax courts have jurisdiction to hear cases involving the actions of the IRS and the Comptroller. A Rockville tax audit attorney could help someone determine if an appeal is in their best interest and select the course of action that is right for them.
Let a Rockville IRS Tax Audit and Appeals Attorney Guide You
The IRS takes its obligations to gather tax revenue seriously. As part of this mission, it has the power to audit accounts and initiate the payment of owed taxes. However, individuals and businesses who receive notice of an audit are not powerless.
A Rockville IRS audit and appeals lawyer could help protect your rights during an IRS dispute, including help you to gather documentation and carefully avoid any potential controversies. If the IRS issues a ruling that you dispute, an attorney could pursue an appeal using every available legal option. Contact a lawyer today to get started.