Do you know why governments collect taxes? We pay taxes on our net income. That tax money is spent on developing public infrastructures like making roads and providing government schemes and other amenities to those people. IRS is the authorized body for collecting taxes and checking irregularities. In this post, we will discuss briefly on the IRS. What are IRS audits? In addition, some tips on how to deal with the IRS.
If you are already facing some tax problems, you can contact a tax law expert (including an IRS tax lawyer in San Rafael, CA). Before going through the working style of the IRS, let’s discuss the history of the IRS in brief.
History of The IRS
Internal Revenue Service, also known as the IRS, is the federal agency responsible for tax collection and checking any irregularities. This agency was founded in 1862 by the US govt. IRS is responsible for collecting income taxes from both corporate bodies and individuals.
IRS regularly monitors all the tax payments made by people and conducts audits to check whether personnel or a corporate body is paying proper taxes or not. According to a study, though IRS audits have decreased since 2010, people have become more aware of IRS laws.
President Truman made significant changes in the IRS in 1950. Since then, the IRS has been working smoothly. If you are already facing some issues with IRS tax payments, you can hire a professional tax law expert (including a tax audit attorney).
What Is A Tax Audit Program?
The IRS conducts regular audits to check irregularities. According to IRS law, it is the job of the IRS to supervise all the tax payments, and they have the authorization to check and audit a person or a commercial body.
When you fall behind on your taxes, you will receive a notice. You will have to visit the IRS to let them know your difficulties. IRS can further offer you compromise schemes to settle your payable taxes. They can also order a thorough audit of your accounts.
IRS tax audits examine all the documents of your incomes, savings and purchases. You will need to give the federal body all of your financial documents. After examining all the papers, they will decide what to do next.
What Is A Dreaded Audit?
Do you know what a dreaded audit is? IRS computer server selects a random person for the audit process. This random audit process can cause awareness and a little bit of fear in public. If all the documents are neat and clean, you have nothing to worry about. If you have any irregularities, the IRS people will ask you about them. You should be prepared enough to deal with these situations.
You should be aware of your spending. Extravagant spending can attract IRS people. For help, you can consult with a professional tax expert.
We have already discussed all the factors of IRS audits. Many people find it difficult to understand all those complex tax laws. For them, the best option is to consult with an experienced person in this field. Only a well-known person can guide you and can represent you in front of the IRS if it’s necessary.