IRS & Sales Tax Audits – Audit Experts – Attorneys, Lawyers, Former IRS – Essex, Morris, Bergen, Passaic, Union – New Jersey

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IRS Tax Audits.

There are several different types of IRS tax audits.

1. Mail correspondence.

The most common type of IRS tax audit is the mail correspondence audit. IRS audits about 1.5 million taxpayers through mail correspondence. These usually occur as a result of 1099 and w-2 mismatches. IRS  collects billion of dollars through these tax audits.

2. DIF.

The high DIF score is the second most common way. The DIF score or the discriminatory index function score tax audit means your tax return fell out of the National Standards for various credits, expenses or something did not make sense on your tax return. Each tax return has a DIF score.

The computer will self generate these score and tax audits.

3. Random sample audit. You won the IRS lottery and IRS will use your tax audit results to set up future DIF scores. this is a bad news audit.

4. National Program Audit.

IRS runs market specialization programs in different areas in the country for different industries. IRS tries to audit all industries to set National Standards. There is list on our website for market specialization tax audits.

6. The Office Audit.

You will get a letter to appear in a local IRS office where a local office auditor will audit selected features of your IRS tax return. These are small and quick tax audits.Many times these are only two or three item audits.

7. The Field Audit.

A more high skilled IRS Revenue Agent will spend days combing through your records. These are more advanced and complicated tax audits conduct at your home, place of business of at your representatives office.

 State of New Jersey Tax Audits

The State of New Jersey audits taxpayers to:

1. Enforce New Jersey tax laws uniformly,
2. Deter tax evasion,
3. Promote voluntary compliance,
4. Educate taxpayers.

While the State of New Jersey accept most tax returns as filed, they audit some returns to verify accuracy and evaluate compliance.

Sales Tax Audits do not always result in the taxpayer owing additional tax, penalty or interest. The sales tax examiner auditor may adjust a credit carryover or correct distribution without assessing additional tax.

The auditor  sometimes may even determine that a refund is due.
How Are you Selected for Audit?

The methods for selecting a business or individual to audit vary from tax to tax.

Here are some examples of sources the State sometimes uses to identify a potential audit candidate:

1. Internal Revenue Service information.
2. Information sharing programs with other states and state agencies.
3. Computer-based random selection.
4. Analysis of Florida tax return information.
5. Business publications, periodicals, journals, and directories.

What types of records will you need to provide?

When the State notifies you of our intent to audit they will also tell you what records you will need to provide.

Some types of records may include, but are not limited to:

a. General ledgers and journals
b. Cash receipt and disbursement journals
c. Purchase and sales journals
d.Sales tax exemption or resale certificates
e. Florida tax returns
f. Federal tax returns
g. Depreciation schedules
h. Property records
i. Other documentation to verify amounts entered on tax returns

 IRS & Sales Tax Audits – Audit Experts – Attorneys, Lawyers, Former IRS – Essex, Morris, Bergen, Passaic, Union – New Jersey