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STRATEGIC TAX LAWYERS:  TAX BLOG

Worried About an IRS Audit?

Tuesday, September 22, 2015
Are you keeping income hidden from the IRS? Even if you are not hiding any income and have given it your best effort, there still may be red flags that the IRS will notice.  Generally, taxes are complicated and the IRS may be suspicious of even the most innocent activities. It is important to understand the term limits of how far back the IRS can ask you to prove income, deductions, expenses, etc.

We are the Strategic Tax Lawyers, a firm of IRS Tax Attorneys in Los Angeles. Our IRS Tax Attorneys in Los Angeles can assist you if you have gotten an official notice from the IRS. Basically, what we want you to know is that the IRS has three years after you file your taxes to audit you. However, there are always extensions and loopholes.  These can occur if the IRS needs more time to audit. In that case, the IRS can send you a form that extends the statute, usually for one year. We, as IRS Tax Attorneys in Los Angeles, can assist you with circumstances like these. In fact, we tell our clients to agree and sign the form. But we advise to take the case for professional advice along the road.

There is one major exception to the three year audit rule. This is if you purposely exclude over 25% of your income. If this happens, then the IRS will have six years, or double the original audit time.  This applies to all tax returns that are filed as of August 1, 2015 or any previously filed returns that are currently pending. Legally, if you exclude over 25% of your income, it is known as a ‘substantial understatement’ of your taxable income.  This is different than overstating deductions.

This can be very nerve-wracking for some, especially since the IRS has no time limit if you never file a tax return.  If you don’t file a tax returns, then you can face criminal violations or fraud.  In addition, the IRS is focusing on offshore income and assets.  The six year rule also pertains if you exclude over $5,000 of foreign income in any overseas account.

Another important piece of information is about FBARs. Now, starting after January 1, 2016, FBARs will be due April 15 instead of June 30.  With this new transition, a six month extension will be allowable, just like traditional tax returns.

Strategic Tax Lawyers LLP are experienced IRS audit tax attorneys in Los Angeles who have counseled clients about their rights if they get audited.  These IRS tax attorneys can assist you with removing guesswork to prevent any issues.  The Strategic Tax Lawyers offer free and confidential consultations about tax-related issues. Call today at (800) 669-4775 if you need assistance.