FindLaw Network

White Plains: 914-686-7171
Chappaqua: 914-238-7171
East Hampton: 631-329-7171

Large Firm Skills
With Small Firm Service

What issues can lead to tax controversies, audits?

| Feb 3, 2020 | Tax Controversies |

Tax season is typically not one that individuals look forward to. Though possibly receiving a refund can make having to go through the often tedious filing process worth it, it can still be a stressful time, especially if the IRS decides to conduct an audit. Tax controversies can cause anyone to panic, but there are ways New York residents could help themselves lessen the likelihood of an audit.

One area that could be of concern is itemized deductions. Most people want to claim as many deductions as possible to lower their tax obligation, but large itemized deductions could raise a red flag. In particular, if someone makes a substantial charitable donation, it could increase the chances of an audit.

Additionally, if individuals do not report all of their earned income, it can be a major red flag for the IRS. The agency receives information on earned income from various sources, and if an individual does not disclose all income, an audit could result. Even if individuals do work on the side and do not earn a substantial amount, it is important to report that income.

Of course, even if New York residents believe that they have completed their tax documents correctly, they could still face tax controversies. If parties receive a letter from the IRS regarding an audit, it may be worthwhile to seek assistance with the situation. Knowledgeable tax law attorneys can help individuals who receive notice of an audit by explaining what exactly an audit is and the available options for handling the process as best as possible.