Albert S. Golbert Taxation Law Blog on Lawyers.com

Common Misconceptions about Tax Audits

Tuesday, June 9, 2009 by Albert S. Golbert

Common Myths and Misconceptions About Tax Audits

There are many tax audit myths and misconceptions, and unless you know the facts, the auditing process can be confusing and stressful. If you are facing the possibility of a tax audit, here you will find the truth about myth versus reality. The Los Angeles taxation lawyers of Golbert & Associates are experienced in all tax audit matters and can help with all your tax-related needs.

Common tax audit misconceptions include:

Myth 1: If I do not respond to letters and phone calls from the IRS they will not be able to audit me.
This is a major audit misconception. Ignoring IRS letters and phone calls is the worst thing you can do when contacted by them. If you do not discuss the terms of your audit and attempt to answer financial questions, the IRS can automatically seize your wages and bank accounts.

Myth 2: Filing my taxes on time prevents being audited.
Although it is a very good idea to file all your taxes on time, it does not prevent audit. If a discrepancy exists in your taxes, an audit can follow regardless of when your taxes were filed. However, filing on time and accurately can help you if an audit pursues. Keep all records and tax files showing the payment of accurate amounts for proof if audited.

Myth 3: Getting my tax refund back guarantees I will not be audited.
This is a common tax audit misconception. Refund checks are issued after taxes are received and processed. The step in which the IRS evaluates appropriate payments does not happen in between receiving and processing. Appropriate filings are evaluated months after April 15, and if errors are found an audit can follow anytime after.

Myth 4: If I fix errors on my tax return I will automatically be audited.
This is not true. Once proper errors are corrected, and the accurate payment is made, your entire tax file will be assembled. If there is a problem with your corrections and payments, you could be audited. It is best to have an experienced tax attorney handling all of your tax related issues to avoid miscalculations and inaccurate payments.

Myth 5: I will pay the IRS when I feel like it. Being audited isn’t a big deal.
False. Auditing is a serious process and should be handled cautiously. If you have been found paying erroneous sums, the IRS could very well seize your wages and bank accounts, resulting in financial instability. An experienced tax attorney will be able to negotiate payments and payment plans that will ensure the financial stability for your firm and family.

Posted at 16:19 PM

Topic: Taxation