What Is Tax Audit?
Tax audit is an examination of your tax return by the IRS or State Tax Departments to verify that your incomes and deductions are accurate.
If the IRS is satisfied with your explanations and the documentation you provide, then it will not change anything on your tax return. If the IRS proposes changes to your tax return, you can either agree and accept the changes or challenge the agent’s assessment. If you agree, you will sign an examination report or other form provided by the IRS and establish some type of payment arrangement. If you disagree with the findings, you can set up a conference with an IRS manager to further review your case. If taxpayer has fraud, it will come out penalties allowed by law.
Our tax professionals will provide the response needed to clearly communicate your tax position regarding the tax audit letter your received. Unless you can clearly articulate your tax return position to the IRS, you shouldn’t try to handle it yourself and hope for the best.
Why Choose us?
Our tax audit defense service being prepared if you receive an audit notice. Our experts are on your side and ready to put their expertise to work in your defense. We’ll ensure all the paperwork is in order and work with the IRS so that you can have peace of mind.
We Do All Of The Work
We will develop an action plan & a communication strategy with the IRS, and prepare all necessary documents. You can sit back and continue to run your business.
Professional CPA
Work With CPA who know how to prepare for an tax audit, and make sure audit being done efficiently.
Representation
We act on your behalf to ensure your taxpayer rights are protected and communicate with the IRS.
Flat-Rate Pricing, No Hidden Fees
There are no hourly rates or hidden charges. We will provide you an affordable price based on your tax audit situation.
We offer tax audit defense services for all 50 states.
Who Will Get Tax Audit?
| Income | Audit Rate |
|---|---|
$1 – $25,000 | 0.4% |
$25,000 – $50,000 | 0.2% |
$50,000 – $75,000 | 0.2% |
$75,000 – $100,000 | 0.2% |
$100,000 – $200,000 | 0.2% |
$200,000 – $500,000 | 0.2% |
$500,000 – $1,000,000 | 0.6% |
$1,000,000 – $5,000,000 | 1.3% |
$5,000,000 – $10,000,000 | 2.0% |
Over $10,000,000 | 8.7% |
1. High-Net-Worth Individuals
Because catching one big fish is equivalent to catching dozens or hundreds of small fish or shrimp. This is called “Work Smart”. The average probability of all taxpayers being audited in 2019 is less than 0.25%. The probability of those earning less than $500,000 per year is basically less than 0.2%. The probability of those earning more than $500,000 has been jumped to 0.6%, while the probability of those earning more than $1 million is 1.3%.
2. No Income
If you are filing your tax return with no income or only a small amount of income, the IRS will immediately target you, and you will have a 5% chance of being audited. Because it’s hard to believe that you can’t earn a penny a year in the United States. Even people who don’t work have benefits, benefits, social Security income, interest, and so on. If you don’t earn a dollar, the IRS will naturally ask, ‘What do you do for a living?
3. Hiding Income
The IRS has a copy of the Form W-2, Form 1099, and so on that you receive every year. They will use the computer to compare them, and if they find that you’ve missed something, the IRS will send you a letter right away. If the circumstances are serious or the amount is large, you will be audited.
4. Self-Employed Or Freelancer
Self-employed or freelancer who usually receives form 1099 and reporting them on Schedule C. They have a lot of business-related expenses that are tax deductible, and the IRS will check your Schedule C with a magnifying glass.
5. People Who Have Large Cash Transactions
Restaurant owner, waiters, taxi drivers and others who have large cash transaction are also far more likely to be audited than employees with W-2 income. Because a lot of people do not file tax return with cash income. The IRS will also pay attention on people who have $20, 000 or $30, 000 income a year, but have expensive homes or fancy cars, so they are more likely to be audited.
6. Business Loss
Business has profit or loss every year, and there is no guarantee that you can always make money. If there is a loss, it will come to the attention of the IRS, and if there’s something obviously suspicious, the IRS may initiate an audit process. Typically, new businesses require capital investment, and losses in the first few years are common, but if you report losses over many years, the IRS will review them.
Tax Scams or Consumer Alerts
Thousands of people have lost millions of dollars and their personal information to tax scams. Scammers use the regular mail, telephone and email to set up individuals, businesses, payroll and tax professionals.
The IRS doesn’t initiate contact with taxpayers by email, text messages or social media channels to request personal or financial information.
Know the telltale signs of a scam and how to know it’s really the IRS calling or knocking on your door.