Agencies, such as the IRS or Internal Revenue Service are strictly implementing laws in taxation to ensure that individuals, as well as small or big companies, are sending the right annual reports for review. Now, if the documents required are not properly written or computed wrongly which happens due to inexperienced staff, unorganized files, or mismanagement, then it has to be corrected. The authorities will notify you about the auditing of the said papers so you’ll know when these are needed but this time, you better get a lawyer to fix the issues.
This problem occurred because of someone’s incompetence to work on the financial reports of the company but instead of hiring a more knowledgable staff, why don’t you let him learn more about his job to be competent? And then, you can hire a licensed Los Angeles tax attorney who can deal with the paperwork and negotiate with the auditors at the same time to make the situation more manageable. Indeed, you can do such tasks by yourself but when it comes to handling the situation, we can never be sure since we are not experts in taxation and law on this issue.
Try to check on the reasons why the IRS should see you or what they need from you because these are the things that your tax lawyer will do on behalf of your company and that’s the reason why you need to hire one in Los Angeles. Let’s say that when you have a legal adviser on your side, you’ll be more confident and comfortable because he is someone who complies with the law, which you failed to consider. As a responsible citizen, you have obligations to settle and it won’t be good for the reputation of your company to ignore this so it would be nice if you can hire a professional to clear your name.
Math Errors
If we are not experts in taxation or we are not good at preparing the form, then we could make mistakes. For example, while writing down numbers, we might miss one digit or write down a different number unconsciously. These simple mistakes are already reasons for the authorized agency to investigate us – check out https://procedurallytaxing.com/math-error/ to read further.
We can make such mistakes but even when these are unintentional, we will still be questioned. It is not easy to avoid math errors without knowledge or experience in taxation. Fortunately, we have tax lawyers who can help in preparing the forms for us if we are not sure about what to do.
It is better to hire one to avoid being audited. Just make sure that they have a PTIN or preparer tax identification number.
Failure to report an Income
Do you know there is no profit that you can’t hide from this agency? Because some people forgot or intended not to report their income and the IRS knows about it. For example, you have a printing shop and regularly report your daily profit but you took a freelance job to print posters for an event so you are paid.
Let’s assume that you submitted a W-2 form and never failed to do that. You also have a 1099 form for other reports but this time, you forgot about the event job you took so it wasn’t included there. It is not your intention to omit this income but the event organizer included your fee on their report – find out more details.
Therefore, you will soon be audited for that. This means that you’ll need the experts to handle the case and communicate with the agency to fix the problem.
Business Expenses Deduction
You’ll have a problem when reporting too many expenses for your business because these are losses. If you are operating a particular business and loss more, then how can you make a profit? I supposed your expenditures are all necessary because the auditors will find them unusual and will doubt your deductions.
The expenses that are only allowed for deductions are the ordinary or common and necessities for the business operation only. Let’s say that you have an Internet cafe so you purchase a mouse and keyboard which are acceptable since these are basic parts that are always used. But as the owner and manager, you are just there to play games even when there are no customers so how can you earn?
When you are just playing around the gadgets you are using are worn out without gaining profit and they will be declared as deductions. Or maybe you purchased it under the expenses of your cafe but it is for your personal use at home. Well, such things are subjected to auditing so ask an expert’s advice regarding deducting business expenses for your awareness.
Charitable Donation Claims
Some small and big companies usually donate funds to charitable institutions to be used for their events, food supplies, energy bills, maintenance, and other expenditures. Indeed, it would be great to donate because such help is very important since most charitable institutions do not have enough money to support their needs. However, some people use them as a means to collect money or to get deductions on their taxes which is not a good practice.
You should only report contributions that were made for charity because sooner or later, the auditors may come looking for documentation, especially when a significant amount was claimed for deductions. Such wrong actions can be cleared through your tax lawyer, so you’ll need to hire one when in this kind of situation. We all know that you would like to help the foundations in Los Angeles and it is a good deed to send donations because a lot of people are relying on them. But let us not abuse this chance because your bad intentions will get back to you when the IRS comes and ask for documents to prove that you donated a certain amount. Indeed, a lawyer can help you out with this problem but let us try to not use charities if we have good intentions of helping them – read here to know more about the rules.