The tax code is incredibly complicated and intricate. Even when a business or an individual intends to be in compliance with tax requirements, cost-saving measures can easily slip over the line into illegal territory.
As the new year approaches, many tax experts are reporting an increase in tax audits. Come 2014, those with a large amount of assets who are being audited will also face tougher deadlines when the IRS makes informational requests.
Three out of four tax professionals say there have been more audits over past two years
At the 2013 SYNERGY conference, an annual conference of tax professionals that took place this year in Miami Beach, attendees were polled about their perception of corporate tax audits at their places of business. Out of nearly 1,000 responses, a significant majority reported increased audit activity.
Only 25.5 percent of those polled reported that they had not experienced an increase in audit risk over the past two years. On the other hand, 43.5 percent said that their audits had increased by between 25 and 50 percent over the past two years. Even more alarming, 15 and 16 percent reported increases in audit activity of 50-75 and 75 plus percent, respectively. Reasons for the increase in corporate tax audits are thought to include the growing government budget deficit.
Even as more IRS audits are being reported, IRS rules for those being audited are set to soon gain a new set of barbs. Starting in January, individuals or businesses with more than $10 million worth of assets will face strict new deadlines to provide information to the IRS in the course of an audit. Currently, the lack of tough deadlines for providing documents allows companies and individual taxpayers to stretch out the audit process.
Under the new deadlines, an informal request for information will still be the first step, with a flexible deadline established between the taxpayer and the investigating IRS agent. However, if the informal deadline is passed, the taxpayer has 49 days to comply, or the IRS will seek a summons in court. When the IRS seeks a summons, the audit could potentially be divulged publicly.
Call a tax attorney for assistance with your tax issues
If you are facing an audit, or if you need to get your tax practices in line before an audit takes place, you need legal help. Talk to a tax attorney today. Your tax lawyer can ensure you are in compliance with the law and minimize any penalties you may be required to pay.Print this Page