I did my taxes with Turbo Tax and I got the audit defense with Tax resource compan. Can they really help me if the IRS decides to audit me?
What kind of penatlies should I expect if I am audited, they find errors but they are minor?
2007-03-13 03:55:27 · 7 answers · asked by Christopher H 1 in Business & Finance ➔ Taxes ➔ United States
After re-reviewing my return, I show AGI of $45k, 34k taxable, total tax payments 14k refund 6k. I had a AGI of 86k but I claimed foreign income with less than 330 days. Would this get flagged?
2007-03-13 04:23:21 · update #1
If I didn't amend it, would they first try to send something in the mail? I go tmy state return already but not my federal they said by APR10 I should get it. Should I just wait to see what happens or is it mroe severe if I dont do something about it.
2007-03-13 06:19:05 · update #2
Whether or not every form is looked at isn't relevant if we're talking about an audit. In that case, yes, every form is looked at.
You should therefore assume that every form is looked at.
With audit defense, the folks at Intuit (the maker of TurboTax) will pay for an accountant to go with you to the audit. If an error is found in your taxes which was due to an error in the software, Intuit MAY compensate you.
If the error was yours, Intuit will not be able to help you.
If you make a minor error and the IRS believes it was a honest mistake, they may not give fine you more than paying interest on the amount of the error. If they feel that you were attempting to falsify, no matter how small, they COULD prosecute you. In general, this doesn't happen so I wouldn't worry unless you really were trying to commit fraud.
2007-03-13 04:05:47 · answer #1 · answered by Jay 7 · 0⤊ 1⤋
I believe the IRS will mathematically check (with a program) every form and if there is a discrepancy, they will mail you out a letter explaining the error.
I actually made a mathematical error one year and underpaid by almost $500. The IRS mailed me out a form showing my error. I saw the error I made and paid it. No audit… nothing.
As far as the Audit Defense – you are basically retaining them with the amount you sent them. They are your lawyers for this one event – they can NOT abandon you if you get audited. If you get audited, they will defend you up to the highest appeals. I used Turbo Tax also and got the audit defense. There should be no reason why they would not defend you. If for some reason they don’t defend you, you can sue them for breach of contract.
One thing I learned in law school that is very scary for a lawyer.
If a lawyer gets caught with drugs – they will go to rehabilitation and be back in practice a month later.
If a lawyer murders somebody – they can be back in practice after everything is behind them.
BUT - and this is the scary part, if a lawyer abandons a client – and the client files the proper paperwork with the bar – that lawyer will NEVER practice law again (they will be disbarred).
It would be STUPID of the lawyers on the Audit Defense to abandon you if you get audited because you can get them disbarred.
2007-03-13 04:11:37 · answer #2 · answered by Leroy Studying Law 1 · 1⤊ 1⤋
Usually an audit just looks at a particular area, and they'll tell you ahead of time what they're looking at. Some audits look at EVERYTHING.
If errors are found but they're minor, the most likely result is that you'd just pay the extra taxes, with interest - or get a refund for what you were found to have overpaid.
2007-03-13 04:11:07 · answer #3 · answered by Judy 7 · 1⤊ 0⤋
the irs enters all of your return data into their system, plus any reports such as 1099's and W-2's that they receive. the computer programs are designed to identify any items of income that you failed to report and any illogical circumstances, such as no exemptions, but a deduction based on exemptions, or a standard deduction amount that doesn't match the filing status. this is not really an audit. an audit is much more serious and involves personal contact between an assigned irs agent and the taxpayer to clear up any questions.
2007-03-13 05:51:35 · answer #4 · answered by Ovrtaxed 4 · 0⤊ 0⤋
If you didn't meet the physical presense test there's a fairly good chance that that will be caught as the IRS reviews those closely. Claiming an exclusion for a large wad of income isn't something "minor" and will cost you significantly when you're caught out.
2007-03-13 04:49:03 · answer #5 · answered by Bostonian In MO 7 · 1⤊ 0⤋
Mick Dove and Dave Hopkins posted the same question. You should read their answers side by side.
2016-08-23 21:02:53 · answer #6 · answered by ? 4 · 0⤊ 0⤋
Why are all the answers so short these days?
2016-09-19 00:59:46 · answer #7 · answered by marietta 2 · 0⤊ 0⤋