The idea that the Internal Revenue Service could audit you is not something you should take lightly. However, it’s also not something that should keep you up at night riddled with anxiety. Math errors may draw IRS inquiry, but they’ll rarely lead to a full-blown audit. Although there’s no sure way to avoid an IRS audit, you should be aware of red flags that could increase your chances of drawing unwanted attention from the IRS. At Expatriate Tax Returns we very cautious to ensure that there will not be any red flags in your returns, which is why we are the trusted name in expat tax returns. It’s still important that you are educated about IRS audits.
What exactly is an IRS audit, you might be wondering. Well, there are actually four different types of IRS audits. The first and most basic is known as the Correspondence Audit. This is essentially a letter from the IRS that requests your canceled checks and receipts to verify all deductions that you listed on your income tax return. It is unlikely your business is going to be audited in this way.
An Office Audit identifies several particular items on your return and requests that you send a representative with specific documents to a local IRS office for the auditor to examine the documents. Small businesses with sales under $500,000 often find themselves the subject of this kind of audit.
A Field Audit is what you see on television most of the time. In this kind of audit, an IRS agent personally calls the owner, president, or general partner of the business and informs them they are being audited. The agent usually conducts the audit at the place of business and not in an IRS office. Incorporated businesses and partnerships are generally audited in this way.
Random Audits are when an IRS agent is sent to a random taxpayer to review their income tax return. They aren’t looking for anything specific and they usually do not even review the entire return.
Even U.S. expats can be audited by the IRS and it can be a huge hassle. Expatriate Tax Returns doesn’t want any of our clients to have to undergo this headache. We prepare your expat tax returns in the most responsible, expert fashion to help you avoid any penalties or a potential audit. Trust us to prepare and file your expatriate tax returns each year. Call us today at 877-382-9123 or use the contact form on our website at www.expatriatetaxreturns.com.