When you’re facing some issues with the Internal Revenue Service (IRS), it’s important that you face them head-on and come to some sort of agreement. This is particularly crucial if you happen to get audited by the IRS.
These audits might come with some penalties that you should also be aware of. Below, we’ll give you some strategies to employ that will help you move forward.
Here’s what you should know about dealing with IRS audit penalties.
Understand What Happens When You Get Audited
First and foremost, you should get to know what an IRS audit is and what it entails. An audit refers to an official review based on discrepancies between the income you’ve brought in and what you claim you owe on your taxes.
These audits come about in a number of ways, but first and foremost begin with written correspondence. You will receive a notice by mail, and it may come by certified mail and require a signature.
From there, an IRS agent will be assigned to the case and will conduct a thorough review into the reason for any discrepancies in your tax filing.
Find Out What Penalties the IRS is Threatening
Next, it’s important that you take the time to figure out what kind of penalties you’re facing. You might be required to pay fees when the amount you said you owed was misstated by 10% or $5,000 or more.
You may also be responsible for any interest that you’ve been charged in the interim, in addition to penalties for misstating the value of any real estate property that you own, or otherwise engaging in activities that appear to point to avoiding taxes.
Depending on the weight of their findings, it might even be possible that you face criminal charges or other legal challenges.
Try to Come Up With a Settlement or Payment Plan
It’s crucial that you try to find an agreement or some sort of common ground with the IRS. This way, you can lessen any penalties and save yourself lots of money and heartache.
When you reach out to the IRS for a payment arrangement, you’ll be able to come up with a monthly amount to pay, rather than owing everything all at once. This will allow you to pay off anything that you owe on your time and in a way that doesn’t create any financial peril or hardship.
Hire a Lawyer and Look Into Options
After being audited, it’s a good idea to speak with a tax attorney that can make the picture clearer for you and help you explore your options. This might be something as simple as creating a debt consolidation plan, or you may have the audit dismissed, or need some defense.
Check here to look into information from professionals:
Follow the Steps for Overcoming IRS Audit Penalties
The points above break down what you should know about IRS audit penalties. Handle your tax needs upfront so that you’re always taking care of your tax obligation. Check out other articles related to getting your debt and finance under control.