The Internal Revenue Service regularly performs tax audits of both corporate taxpayers and individuals. Although tax audits are conducted year-long, they often spike during the few months after the tax season, especially when problematic or misleading returns come under the IRS microscope.
Irrespective of when an “examination” or audit commences, an IRS auditor would be assigned to your case.
While IRS tax auditors are trained to be efficient, they’re also well trained to be comprehensive and thorough – and depending, to a large extent, on the structure and complexity of the individual or company’s tax situation, the IRS audit process usually takes more time than you may estimate as a taxpayer.
This could be particularly disconcerting to taxpayers who face an egg shell audit case in which the main goal is getting the IRS audit closed as early as possible in order to mitigate any criminal or civil tax exposure which underlies an audit.
In a majority of cases, the IRS would wrap up their tax audit within one year. Even though the agency has up to three years to audit a tax return, the IRS prefers to conclude audits before the expiration of the statute of limitations.
Types of Bankruptcies
Chapter 7. In a Chapter 7 bankruptcy, all of the debtor’s nonexempt property is liquidated and the proceeds distributed to creditors. Individual debtors receive a discharge of personal liability for pre-petition debts, subject to exceptions in §523, whether or not a proof of claim was filed or the debt was allowed under §502.727(b). Read More
Well he won the lottery. Specifically he won the “Green Card” lottery. He and his wife came all the way from an Asian country to “Live The Dream” – specifically the dream of living in the United States of America.
He spoke English. His wife did not speak English. He believed in strict compliance in the law. His wife relied on him to ensure her compliance with the law. Read More
June is typically the most popular month for weddings. Did you ever wonder if there is a divorce season?
I did. And I found out that just like there is a season for getting hitched there’s one for getting unhitched too.
A little humor with some tax jokes on TaxConnections Tax Blogs.
♦ A tax attorney defended a case of tax evasion for an affluent client. He devoted over a year to the case, familiarizing himself with every loophole and angle of current legislation, and made a brilliant argument before the court. His client was called out of town when the jury returned with its verdict, a sweeping victory for his client on every count. Flushed with victory, the lawyer exuberantly sent an email to his client, “Justice has triumphed!” The client immediately emailed back, “Appeal at once!”
♦ “Ignore them and they’ll go away” is great advice for some of life’s annoyances. Unfortunately, it doesn’t apply to taxes. – Martha C. White
♦ I’ll tell you some tax jokes because I think you’d depreciate them! Read More
If you or your child has ever played the game “Sims”, then you know what happens when you fail to pay your bills on time. The Repo man comes and zaps your couch into nonexistence with a laser gun! It’s a traumatic moment for your Sims, but one that can be rectified with time and a few more Simoleons (Sim currency). IRS seizures, or liens, don’t work quite the same way of course, but the end result is similar: They will take what they are owed. How can you stop a tax seizure? First, let’s look at the pre-seizure process.
The IRS has a three-step process to ensure that you are adequately notified that they intend to seize your property and/or pay. This is intended to allow you to appeal or contest the tax levy. You’ll receive a “Notice of Demand for Payment,” a “Final Notice of Intent to Levy and Notice of Your Right to a Hearing,” and then if you don’t respond, the IRS can Read More
What is an Eggshell Audit?
An eggshell audit is one in which the taxpayer has filed a fraudulent return in a prior year and the auditor is not aware of potential evidence of civil tax fraud or a criminal tax violation. A tax return is fraudulent if an additional tax is owed due to (i) a deliberate intent to evade tax or (ii) there is a willful and material submission of false statements/documents in connection with the return. It is considered an “eggshell” audit because of the care one must take – i.e. walk on eggshells – to guide the examination and prevent suspicion by the auditor.
What are the Risks of an Eggshell Audit?