Tax Audits – IRS & State Audit Defense
We are a local tax firm that specializes in Affordable IRS Tax Defense.
You can hire Former Local IRS agents, managers and appellate agents who worked out of the local South Florida IRS offices for a combined 60 years.
We have worked as agents, managers, teaching instructors, appellate agents and have even taught tax law at the Internal Revenue Service.
If you are undergoing a tax audit in West Palm Beach it only makes sense to hire former government employees who know all the solutions, all the remedies, and all the different tax defenses to use for undergoing an IRS or State of Florida tax audit.
Also on staff are tax attorneys, tax lawyers, certified public accountants, enrolled agents and former appeals agents with the Internal Revenue Service.
We have been in private practice right here in South Florida since 1982 and we are A+ rated by the Better Business Bureau.
IRS Facts for Tax Audits of Income and Business Audits
The IRS audits about 1 percent of the individual tax returns.
143.4 million – Individual federal tax returns filed in 2011.
1.4 million – Individual tax returns examined by the IRS, resulting in notices being mailed or in-person audits.
90 percent – Tax returns audited in person resulting in a recommended change in taxes.
85 percent – Tax returns audited via mail resulting in a recommended change.
$15.1 billion – Amount of recommended additional taxes from the audits.
$16,851 – Average recommended additional taxes per in-person audit.
$8,241 – Average recommended additional taxes per mail audit.
This Source material is from the 2012 Internal Revenue Service Data Book.
The public has a right to look at any information regarding IRS statistics. Simply go online to IRS.gov and you will find a wealth of information.
Did you win the IRS Audit Lottery, fight Back
If you won the IRS audit lottery you should never go into IRS unrepresented for an IRS audit. As a former IRS agent seeking good professional tax will in the long run save you aggravation, grief, stress and keep money in your pocket in the long run.
If you have received an IRS letter or notice that you are going to undergo an IRS tax audit is in your best interest to call former IRS agents and managers who know all of the protocols, techniques and tax defenses to best defend your tax return that is undergoing an IRS tax audit.
Some of the Reasons why IRS selected your tax return for an IRS audit – IRS Tax Audit Flags
1. High income, big trigger.
If your income is $200,000.00 and over; the audit rate will be one-in-twenty seven of being audited. If your income is $1,000,000.00 or more, the audit rate will be one-in-eight of being audited. This is just a fact of life.
2. Failing to report all of your taxable income.
The IRS receives copies of all 1099′s, W-2′s, W-2G’s and K-1′s that you receive. If the income from the 1099′s, W-2′s, W2G’s and K-1′s are not shown on the tax return, the tax return will be audited.
3. Deducting the home office deduction. Even those these deductions are allowed IRS scrutinizes office in the home deductions.
The space used in your home must be used “exclusively and regularly” as your principal place of business. “Exclusive use” means that a specific area of the home is used only for trade or business. If you can prove the home office deduction, then take it. If you can’t prove it, don’t take it.
4. Deducting large charitable contributions. If you’re been to take a huge charitable deduction many times it is a good idea attaching a copy of the check to your tax return to prove the tax the deduction.
If your charitable deductions are large compared with your income, the return will be audited. The IRS is aware of what the average charitable donation is for a given income level. If you have donated and deducted a conservation easement to a charity, chances are good that you will be audited.
5. Deducting rental losses.
Normally, the passive loss rules prevent rental losses from being deducted. There are two exceptions, if you actively participate in the renting of your property, you can deduct up to $25,000.00 of the loss against your other income; but this $25,000.00 limitation phases out as adjusted gross income exceeds $100,000.00.
The second exception applies to real estate professionals who spend more that 50% of their working hours and 750 or more hours each year materially participating in reals as a developer, broker, landlord or the like. The IRS will be requesting that you prove the required hours, especially if are a full time employee.
6. Deducting business meals, travel and entertainment in excess.
The IRS has specific record keeping requirements for these type of deductions. The IRS is aware that many taxpayers overstate these type of deductions.
7. Deducting losses from a hobby activity.Check with us regarding hobby losses.
If you treat your favorite hobby as a business on your tax return with a net loss, you have a good chance of being audited. If you are audited, you will need to prove that your activity is a profit making activity and not a costly hobby.
So make sure that you run your activity in a businesslike manner and can substantiate your expenses with supporting documents.
8. Running a cash business, huge red flag!!!
If you are in a cash-intensive business, like taxis, car washes, bars , hair salons, restaurants, you will be audited. The IRS is aware that individuals who primarily receive cash, don’t report all of their taxable income. The IRS has various audit techniques to determine unreported cash income.
9. Failing to report a foreign bank account. FBAR Accounts, a new target for the IRS.
If you fail to report a foreign bank, you will be assessed large penalties. If you have any signature authority over a foreign bank account, you will need to consult with a tax professional to determine the correct reporting requirements for that account.
10. Engaging in currency transactions.CTR’s.
If you are engaged in cash transactions in excess of $10,000.00, the IRS will receive reports of these transactions from the financial institutions. Further, if you engage in suspicious cash activities, the IRS will receive a “suspicious-activity report” from the various financial institutions.
These transactions usually indicate that the the taxpayer is trying to hide income from the IRS. Try to avoid these type of transactions.
If you live in the South Florida area contact us today for a free initial tax consultation about an IRS or State tax audit.
We are A+ rated by the Better Business Bureau and are without complaint.
West Palm Beach – Tax Audits – IRS & State Audit Defense – Former IRS, CPA’s, Attorneys
