Many New York City and New York State Capital District residents know that tax season is right around the corner and it is not on top of their wish list of pleasurable activities. After all, the filing of income tax returns is a time consuming process, and the complex tax laws are sometimes confusing. For most of us, we wished there was a simpler way.
While the process can be painful, it does not compare to the hardship you will potentially face if your tax return is audited by the IRS. People who make significant money (more than $200,000), are self employed, or have higher than normal itemized deductions are most likely to have to face the prospects of an income tax audit. You can get IRS tax help with a tax attorney or CPA. However, keep in mind your best audit defense is actually spending time with your tax return preparer to make sure the numbers on the return you are filing this season can be substantiated. I can’t tell you how many times someone says to me when I ask them if they reviewed the tax return? “No, I just signed the tax return and did not look at the numbers”. This is a very big mistake since both the IRS and NYS will hold you liable for tax issues in your tax returns. Of course, they can also penalize your tax preparer (usually either a $1,000 or $5,000 fine – higher fine if conduct is willful), but they will also hold you liable for the underpaid taxes and penalties so the tax problem is yours to resolve.
For those you who are selected for an income tax audit, you should not fear the worst. Most importantly, anyone under an income tax audit should get IRS tax help by hiring a tax attorney or CPA to help them, and should have that person respond to the IRS in a timely manner. Ignoring IRS income tax audit notification letters creates big problems for an individual since the IRS will simply adjust the tax return in its favor and you have no chance to provide any input. Therefore, keep in mind that when you sign your income tax return this year to review the return in detail, ask questions, and know what you are signing.