No one wants to be notified of a tax audit. Tax audits are frightening for many individuals and business owners. At Kagan & Associates, Ltd. we believe no one should attempt to defend themselves in a tax audit without professional assistance. We can provide that assistance for you if you find yourself dealing with a tax audit.

In simple terms, a tax audit is a thorough review and examination of an individual’s or a business’s financial records and tax returns by a government tax authority, such as the Internal Revenue Service. The purpose of an audit is to ensure that the taxpayer has reported their income and expenses accurately and has complied with all applicable tax laws and regulations.

During a tax audit, the auditor may request supporting documents, receipts and other evidence to verify the information reported on the tax return. The audit process aims to identify any errors, discrepancies, or potential instances of tax evasion. If the auditor finds mistakes or discrepancies, they may make adjustments to the tax return, resulting in additional taxes owed or refunds due. If additional tax is owed, typically the auditor adds relevant penalties and interest to the balance owed by the taxpayer.

It’s essential to keep accurate and organized records to make the audit process smoother and to ensure compliance with tax laws. While tax audits can be intimidating, being prepared and honest with your tax reporting can help alleviate potential issues.

IRS income tax audit rates have been low in recent years, but with new funding federal tax audit rates are expected to increase significantly. If you have been notified of an audit, contact us to review the specifics detailed in your audit notice. We can provide you with representation under your power of attorney and take over communications with the auditor on your behalf. In some cases, having a professional intermediary deal with the auditor can help prevent an expansion of the audit scope because of inadvertent statements made by the taxpayer. We can help you navigate the audit process as efficiently as possible.