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How Serious is a Mistake on my Tax Returns?

How Serious is a Mistake on my Tax Returns?

The moment you receive a notice from the IRS about tax returns you filed, you may be filled with panic. The IRS is accusing you of making an error on your tax returns and now wants to conduct an audit.1 You immediately think of all of the possible penalties for tax evasion and fraud – such as prison time and costly fines – even though you never intentionally gave the IRS false information. Now is the time to calm down and call an attorney who can guide and advise you throughout the audit process.

One of the most important things to do in an audit is to be prepared and cooperate, including having the paperwork to back up the information provided in your tax returns. Always have an attorney by your side who can protect your rights.

What if a Mistake was Found?

Because audits are often initiated due to potential issues, the IRS commonly finds mistakes on audited returns. Some common mistakes include the following:

  • Mathematical errors
  • Missing information
  • Reported income that is too low
  • A drastic increase in deductions

Differences in your state and federal tax returns

If you were found to make a mistake on your return, the IRS will not automatically assume that you were engaging in tax fraud or attempting to evade taxes. Their auditors are specially trained to identify when an inaccuracy was simply the result of negligence and when it appears to be an intentional attempt to defraud the federal government. Only a small fraction of people who make errors are charged with tax fraud.

That being said, the IRS can impose a 20 percent penalty for making an error, in addition to any taxes you did not pay due to the mistake. For some, this can be a hefty tax bill. In some cases, your attorney can communicate with the IRS and argue that the penalty should be dropped because you simply made an honest mistake.

Contact our IRS Tax Relief Lawyers for Assistance with your Case

While getting audited due to tax mistakes is always stressful, the process can go more smoothly and can result in fewer penalties if you have an IRS audit penalties lawyer helping you. Please call Attorneys Tax Relief(800) 261-6671 for assistance today.

1https://www.irs.gov/businesses/small-businesses-self-employed/irs-audits

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