Understanding More About Tax Audited Financial Statements

If you are in New York or for that matter in any state, when you receive a notice from the IRS that you are going to be audited you need to get all your tax audited financial statements ready for the meeting. Maybe you are not well versed in the intricacies of the rules so it is best to research and hire a good CPA in NY. It's important to know what your rights are in an audit so you know what you need before you go. People are intimidated by the IRS and as long as you or your CPA can prove where your money went then it will be a help.

There are a few things that you need to consider when the IRS contacts you. The IRS can use certain things to try and confuse your meeting. Keep these in mind if you are audited:

1.You must have a canceled check or a receipt in order to claim anything as a deduction.
2.If you are not satisfied with the auditors' decision you can appeal it. Only appeal it if you can prove what you think is wrong.
3.You must be prepared to show the IRS everything regarding your finances; what is coming in and what is coming out.

During an audit you may be given paperwork to sign. You need to read through each and every section before signing your papers because you may lose your right once you sign. The rights you may sign away may be the rights you have for an appeal and the admittance of you owing more taxes. This is the reason that an expert CPA can help you get it right. As CPA are trained in audits, preparation of financial statements and tax related issues, it might be well worth to hire a CPA and get your tax audited financial statements done the right way.

In some instances you may have a large deduction that you would like to count toward your taxes but you have no receipt. There is a way that you can prove a deduction and claim it without the records. You or your CPA could get a legal affidavit from the person or company that you attributed the money to. You can also have the person or company come in and give an oral affidavit stating that the money was given to them in cash and the amount that was given.

If you do need to appeal an audit you do have that right. It's important to know your rights before you go into an auditing meeting. You can take the advice of your CPA and control how well the meeting goes as long as you or NY CPA understands taxes and is knowledgeable of what the IRS can and cannot do. If you go through an audit and you were not satisfied with the way things went the CPA can challenge the auditors' final decision. A lot of the times the auditors so make mistakes during the audit and may not be brought to anyone's attention unless you do appeal it.

Some audits can be conducted by mail. Sometimes the most intimidating thing about audits is confronting the auditor face to face. The taxes CPA can conduct your audit by mail as long as the rules are followed and their requests are satisfied. You can provide everything you need to provide them with by mail if you do it in a timely manner. The benefit to an audit by mail is that it gives the CPA the opportunity to search for the right paperwork needed for each claim that the IRS is questioning.

You can avoid the stress by hiring a CPA in Manhattan and keeping all the paperwork well organized with every receipt in its place. But this is just not always possible, especially if you run your own business or you work outside the home. Try to keep the paperwork as organized as possible and if you are audited do not panic, just hire an experienced CPA in tax and audits to face the auditors with confidence.

Jonathan Medows, CPA, MBA is the Managing Member of MEDOWS CPA, PLLC, a boutique New York CPA firm serving the needs of individuals, freelancers, self employed individuals & small businesses. To see how he can help you reduce your tax liability and keep you in tax compliance please visit his website:
Medowscpa.com