Why Have I Received an IRS Tax Audit?
Friday, December 23, 2016

Why Have I Received an IRS Tax Audit?

It happens to countless people throughout Fort Lauderdale. They will receive a letter from the Internal Revenue Service requesting an audit of a past tax return. While it is understandable to think the worst, a tax audit does not necessarily mean you will face significant penalties. However, it does the mean the government wants to carefully review your return to resolve any discrepancies. Most tax audits are the results of simple human error that can be easily resolved.  But there are more complicated cases that may require the assistance of a Fort Lauderdale tax lawyer.

Reasons for a Tax Audit

One of the biggest myths about IRS tax audits is that it only happens to the wealthy. Nothing could be further from the truth. The level of a person’s income plays a very little role in a tax audit. But there are some other reasons the government will review a past return.

  • Unreported Income:   When filing taxes, it is important to accurately report all your earnings. Your earnings may include more than just the income from your job. They also include dividends, interest and even gambling winnings. All of these categories qualify as taxable income.
    • Contributions to Charity: This is one of the few exceptions where a person’s income level comes into play. The IRS has guidelines on the standard size of charitable donations based on income. If your deduction is much larger than the average for your income level, it is likely to be scrutinized by the government.
      • Employment Status: Many people incorrectly file their taxes as independent contractors rather than as an employee of a company or corporation. This error can affect the amount of money you will owe Uncle Sam.
      • Home Business:  Having your own home business has many advantages. However, you must prove your home office space is used exclusively for business purposes to claim deductions for expenses and depreciation.
      • Cash Transactions:Banks are required to report any deposits or withdrawals of $10,000 or more to the IRS. These transactions are more likely to draw scrutiny from the government.
    • Deductions for Travel, Business and Meals: To claim these deductions, it is very important to keep detailed records. Make sure you have receipts from gas stations, restaurants, hotels and any records that can accurately track your mileage.
    • Repairs & Maintenance: When filing your taxes, it is important to discuss with your tax preparer which repairs and maintenance qualify for deductions. The IRS may require you to depreciate expenses deducted on your return.

    How a Fort Lauderdale Tax Attorney Can Help

    While most tax audits can be easily resolved, others can be far more complicated. It is also important to understand the IRS is also known to make mistakes. The best solution is to seek representation from an experienced tax lawyer with a track record or protecting the rights of each client. Fort Lauderdale tax lawyers Ira Zuckerman bring more than 30 years of combined experience in handling some of the most complex tax problems. Over the years, they have successfully represented men and women with their disputes with the IRS. To learn more, contact the law offices of Zuckerman Law, LLC and schedule a consultation to discuss your case.

500 E Broward Boulevard, suite 1710
Ft. Lauderdale, Florida 33394