Located in the Inland Empire region along the Santa Ana River is Riverside California. At roughly 60 miles from east of Los Angeles, Riverside is part of the greater L.A. area. Riverside has roots in both the past and future. Riverside was founded in the 1870s and is the birthplace of the citrus industry in California. Additionally the city is home to the Mission Inn – a historical and cultural landmark. Other landmarks include the California Citrus State Historic Park, the Parent Washington Navel Orange Tree, and the Fox Performing Arts Center. However, culture and history are far from the only draws to the area.
Riverside is also home of a prosperous and highly diversified economy. Riversides unique architecture and proximity to Hollywood makes the area a popular choice for filming. Furthermore, Riverside has maintained a good deal of its manufacturing jobs with a focus on light-industrial products. Major employers in the city include the County of Riverside, USC – Riverside, and Kaiser Permanente.
People certainly strive to live in prosperous areas where they can find a nice home, a good job, and ample amenities. Unfortunately, for those in such areas outside of major metropolises like L.A., they may face an increased audit risk. A study performed by the National Taxpayer Advocate determined that there are clusters of IRS enforcement activity in prosperous area outside of major cities like L.A. If you have been targeted by the IRS for a tax audit, the Hoffman Law Firm can help.
What Are Common reasons for a Tax Audit?
Tax audits can occur for many reasons. One of those reasons is due to computerized assessment and scoring. This type of computerized examination will return a Discriminant Function System (DIF) score. The DIF score represents the potential for change. Unreported Income DIF (UIDIF) score assesses the likelihood that you have undisclosed income. IRS employees then manually assess the tax returns that received high scores on these tests.
Another method the IRS uses to determine whether a tax audit is appropriate is known as form matching. When an employer provides his employees or contractors their, respective, W2s and 1099s, one copy is sent to the individual and one copy goes to the IRS. If the corresponding form is missing, then this is a sign the either the employer or employee has failed to satisfy some aspect of their tax obligation. The IRS may also match information contained in these forms. Therefore, taxpayers who round their numbers or are careless in their math can also find themselves a target for an audit.
Finally as the tax agency for the entire United States, the IRS is privy to a wealth of information and statistical data about taxpayers and their businesses. Individuals who claim outlandish deductions or even deductions outside of the average for a similarly situated taxpayer or business can become the target of an audit.
How will my Tax Audit be Administered?
If you face an IRS tax audit in California, there are two main methods for the audit process. The first is an audit by mail. Audits by mail are often used when the IRS needs additional information or you forgot to include an essential element of the filing. If you audit is by mail, you can request an in-person audit if it appears that your tax, financial, payroll, and other records would be too voluminous to ship by mail.
As one probably can already tell, the second method of audit is an in-person audit. Audits of this type are often held at the location where the business regularly keeps its records. You may petition the IRS to change the location to the local IRS office, however the IRS is under no obligation to grant this request. Additionally, if you have moved the IRS will consider your request to move the audit.
The auditor is likely to request additional records from the taxpayer. Records regarding the taxpayers assets must be kept for the duration of time the asset is owned, plus three years. Payroll taxes must be retained for a minimum of four years. Tax records are required to be held and retained for at least six years. If the taxpayer is unable to produce documents within these timeframes, additional penalties may apply.
Tax Audit Lawyer Serving Riverside
Are you facing a tax audit or another type tax enforcement action? The Hoffman Law Offices is dedicated to assisting taxpayers targeted by the IRS for an audit. To schedule a free tax consultation, call 800-897-3915 or contact us online today.