What should taxpayers do if they get an audit from the IRS?
Reports suggest that the Internal Revenue Service intends to use nearly $80 billion in new funding from The Inflation Reduction Act of 2022, to pursue toward the hiring of 87,000 new IRS agents.
One of the items from the bill states, “we are closing tax loopholes and enforcing the tax code,” informs Daniel Ahart, chief tax officer at the tax preparation company Daniel Ahart Tax Service®
So how to handle the issue of getting an IRS notice or letter on the mail?
The IRS performs audits by mail or in person. However, should your account be selected for audit, the IRS will notify you by mail ONLY. The agency won’t initiate an audit by telephone.
According to irs.gov, an IRS audit is a review/examination of an organization’s or individual’s accounts and financial information to ensure information is reported correctly according to the tax laws and to verify the reported amount of tax is correct.
Your notice or letter will explain the reason for the contact and give you instructions on how to handle the issue. If you agree with the information, there is no need to contact the IRS. Note: As explained on the IRS website, you can find the notice (CP) or letter (LTR) number on either the top or the bottom right-hand corner of your correspondence.
You may want to contact your CPA or tax preparers. Schedule a consultation with your tax experts now.
Every year the IRS mails letters or notices to taxpayers for many different reasons
- You have a balance due.
- You are due a larger or smaller refund.
- We have a question about your tax return.
- We need to verify your identity.
- We need additional information.
- We changed your return.
- We need to notify you of delays in processing your return.
Here are some do’s and don’ts for taxpayers who receive one
More Crypto Tax Enforcement?
It’s no secret that the IRS is after crypto tax dollars and after fans of crypto who don’t report or who don’t do it correctly. There isn’t a dollar amount fixed for going after crypto, but the new law vaguely says they’ll be specifically pursuing “digital asset monitoring and compliance activities,” apart from more general tax enforcement.
Also read: Take Care of your Crypto Taxes in 5-Easy Steps
The IRS is updating it forms too…
There is already a virtual currency question at the top of the tax return you filed—or still need to file—for 2021. As we will see, that question will be tougher for 2022.
Taxpayers who merely owned virtual currency at any time in 2021 can check the “No” box when they have not engaged in any transactions involving virtual currency during the year, explained Daniel Ahart, chief tax officer at the tax preparation company Daniel Ahart Tax Service®
Also read: Frequently Asked Questions on Crypto Taxes
Schedule a consultation with your tax experts now.
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