Long Beach, California is known throughout the nation and perhaps the world as a cultural destination located along a beautiful coastline. The city is home to landmarks such as the Long Beach Opera, Long Beach Museum of Art, RMS Queen Mary, and the Aquarium of the Pacific Ocean. Still others know Long Beach for its extremely comfortable Mediterranean climate.
But Long Beach is more than a desirable place to live and visit. As the 7th largest city in the state, Long Beach is also a hub of commercial activity. In fact, the city is home to one of the most active and busy shipping Ports in the entire country. The port facilitates an exchange of goods across international borders. “The International City”, is one of the West Coast’s main portals to global trade.
All of this economic activity means that many people who live in and around Long Beach are more economically fortunate than on average. While settling in a prosperous area comes with many benefits, a study by the National Taxpayer Advocate revealed that IRS audits and other enforcement actions are often clustered in wealthy metropolitan areas. This is especially true if you are a small business owner living and working in the wealthy communities in and around Los Angeles. If you or your business is facing a tax audit, the Hoffman Law Firm can help.
What are common reasons for an IRS audit in Long Beach?
The reasons that may trigger an audit can be as simple as a being randomly selected by the IRS’ computers. While a random audit is certainly less than an ideal situation for a taxpayer, it is not necessarily a reason for panic. An experienced tax attorney can help you gather all required tax and financial records and he or she can review them to spot potential problems. If potential issues are discovered, your tax attorney can advocate on your behalf with the IRS. Even if your tax attorney does not discover problems with your past tax filings, he or she can guide your matter through the audit process to reduce the risk of complications due to misstatements or confusion.
If you suspect that you may have made more serious errors, these may form the basis for your tax audit. Taxpayers who only use round numbers, claim excessive deductions for their level of income, or fail to include all sources of income. If you hold or control foreign financial accounts or foreign assets and have not made FBAR or FATCA disclosures, you may be subject to civil or criminal penalties. Furthermore “cash” businesses that have failed to account for, hold, and pay over payroll taxes may face criminal charges and harsh penalties.
What Should I expect if I have been Selected for an IRS Audit?
Selection for an IRS audit generally means that you will go through one of two different audit processes. There processes are:
- IRS audit by mail – Certain audits can be completed solely through correspondence by mail. An audit of this type will begin with an IRS letter requesting missing documents or other information regarding your tax return. You may be requested to elaborate on itemized deductions, sources of income, or reported expenses. You may also request an in-person audit if you believe that it would be overly burdensome to mail the records.
- In-person IRS audit – In-person audits are often held at the place of business for the company being audited. Alternatively, audits can be held at the local IRS office. If the audit has already been scheduled for the location where your books and records are regularly stored the IRS will consider your request to move the audit to an IRS office, but it is under no obligation to accept it. If you have moved, you can request a transfer to a local IRS office.
A taxpayer should gather all of his or her records financial, tax, and payroll records. The taxpayer should have at least six years or tax records, so all relevant requested documents should be gathered. Furthermore, payroll records should be kept for at least 4 years. The inability to produce requested records within these time periods can lead to additional tax problems.
Los Angeles Tax Audit Lawyer Serving Long Beach
Are you facing a tax audit? The Hoffman Law Offices are dedicated to assisting taxpayers with difficult tax problems and concerns. To schedule a free tax consultation, call 800-897-3915 or contact us online today.