Tax accountant NYC VS Cybersecurity

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Many tax preparation firms and individuals may find this topic intimidating and complicated because they do not know much about cybersecurity. You may also think about why we are thinking about the role of tax accountant NYC in improving cybersecurity.

However, the following discussion will help you determine the value of the best tax accountant in New York to make the whole system secure and protected from hackers.

Some tasks can be difficult for any individual who does not know much about the specific topic. However, having some information can help you manage the tasks to keep the whole process smooth and functional. 

Cybersecurity is the same unknown thing for all accountants as accounting can be difficult to understand for web developers. However, if you know your role in cybersecurity as an accountant, you can strengthen tax preparation NYC processes and keep the business’s integrity protected and safe.

Let us understand how it works!

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The hackers are always in search of data.

The hackers are always interested in data. The reason is that data helps them identify the individuals, companies, employees, customers, and many others.

They can also get access to specific physical and email addresses, SNNs, and specific details regarding businesses, jobs, or personal activities.

The secondary purpose of hacking is to find credit card information and utilize it for numerous purposes. This situation can be a piece of bad news for the businesses.

Mainly, stealing card information is the most favorite habit for digital black marketers. Many think that these cards can be canceled at any time.

However, the purpose of stealing credit card data is to recognize the card owner. They can identify your SNNs, date of birth, and much other information to use for many immoral and fraudulent activities.

In the above-described situation, it is clear that tax preparation NYC is a task in which 

accountants have all the financial records of a particular company. More importantly, the accountant takes the responsibility to keep all the information protected and safe.

Here, he needs to have some information about cybersecurity, hacking, and steps that can help him keep all hackers and malware away.

Non-Technical data management procedures that tax accountants NYC need to follow.

Knowing what cybercriminals can do for stealing the information helps the best tax accountant NYC safeguard all the records and make the business protected. Technicalities of cybersecurity are next to impossible for accountants.

However, they can take some non-technical steps to shield identity data. We are discussing some of these steps here to help tax preparer NYC: 

Knowing what cybercriminals are looking for makes it easier to safeguard that valuable information and protect your business. Here are a handful of non-technical approaches that will enable your tax prep business to better shield identity data.  

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You do not need to save all records.

All information, especially about the customers is not required to save. It means that less information is the best way to make the journey of the hackers a total waste. After all, no one can steal that information, which you have deleted already. 

Therefore, cybersecurity experts recommend keeping only those records in the system, which is necessary in the eyes of law. While talking about customers, only contact information is required to keep them engaged and for future coordination. The law also suggests that you should delete all client identity data after every three years.

Train all the employees to be skeptical

Social engineering scams and phishing can distract your employees easily. The hackers use these practices to make your employees fool. It happens when your employees share their personal and financial details with these hackers. 

The experts think that emails are the best tool to get information from any individual. In this way, the hackers send scams to those who are unsuspecting recipients. You should train your employees to keep them away from all unknown senders.

Only share your information with those who are trustworthy for you or are coordinating with you officially by using official email addresses. Sometimes, they may engage you through clicks, downloads, attachments, and visuals. 

The only thing that can keep you and your records protected is vigilance from your end. The best practice in this regard is to use only authentic and secure document sharing tools. Also, use only verified communication tools to avoid any hanky-panky in the form of hacking.

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Limited access to identity data

Generally, all employees have access to identity data, although this trend has been changed a lot. Minimizing the access to explore critical data is the best practice to keep cyber criminals away from your crucial information.

Give limited access to those employees, which do not need to know everything about the business. Only authenticated and verified staff members should have access.

The tax accountant NYC, who provides tax service NYC, helps you assign access as per the need of every employee.

However, your business analysts can guide you better in this regard. When you implement such limits, you leave only a few access points. If you have done it, the hackers will have only a few opportunities to hack your records.

Make your tax preparer accountable.

All online businesses and those, which are connected with smart devices, can be at particular risk. In this tech-enabled world, everyone can have the opportunity to breach security and get access to sensitive data.

In this situation, the best tax preparation in NYC is possible only if you make the accountant responsible for all these data breaches.

Although these people were responsible previously as well, now, they are in a more vulnerable state. The reason is that data is the most precious asset for any business, and accountants are taking care of it.

So, if they are irresponsible or not vigilant at some point, they can create a dismal situation for the businesses.

Therefore, they need to open their eyes and try to secure data in such a way that no unauthorized person can get access to this data. If they do not do so, they may face legal obligations. Following the above steps can minimize the risks for the accountants.

However, involving IT experts and using the latest cybersecurity techniques can be the best solution to keep all unauthorized individuals, systems, and malware away from your sensitive data.

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IRS Refund | How To Get My Refund? State Refund NY | Internal Revenue Service

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Whether you are a small business owner or an individual living in New York having a job or a trade.


Profession aside, everyone is legally bound to pay their taxes.

And if you are a taxpayer, then you must be familiar with the term tax refund.

If you are not familiar with it, then we’ll guide you right from the beginning.

Whether you are living in Brooklyn or Bronx or the county Queens, upstate near the Staten Island or the high life in Manhattan.

We, at Tax King, got the tools and expertise to help you with all your tax concerns and make your life easier.

What is Tax Refund? How to get your tax refund from IRS?

Tax Refund is basically the amount that the state government or federal government owes you, because you have paid more than what you were legally required to pay.


It is also known as tax rebate.

People often confuse “tax return and tax refund” with each other. However, they are both very different terms.

People often confuse “tax return and tax refund” with each other.

However, they are both very different terms.

Tax return is a form or forms filed with a tax authority such as the IRS or your state tax agency (New York in this case) that reports all income, expenses, and other information all related to tax.

On the other hand, you get tax refund when you pay more money in terms of taxes to the state government or federal government, than you actually owed.

According to the IRS (Internal Revenue Service), the average tax refund as of May 10, 2019, was nearly $3,000 that the IRS had to give back to the taxpayers.

A lot of times, people feel like tax refund is kind of a bonus or free money.


Although that is not usually the case.

Why? Because in actuality it is just an interest-free loan that a taxpayer has given to the government, and in return the taxpayer gets nothing more than the original amount.


It is your own money, which is in fact coming in your hand after a year.  

This can be avoided, and your hard-earned money will not go in other hands before coming back to you.

 All you need to do is to consult a CPA or expert tax professional service such as Tax King.


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Tax professionals such as Tax King have a life-long experience with the agencies such as IRS and State Tax agency in paying taxes and dealing with all the other legal matters.

Experts in tax field can actually improve your tax refund, get you all the money that is legally yours and have a better, more in-depth understanding of the IRS guidelines, which means better interpretations and accurate knowledge of how the taxation departments work.

Consulting such professionals can actually:

➡ 1. Improve your dealings with the taxation departments

➡ 2. Help you lower your tax liability, by analyzing and studying your financial information.

➡ 3. Can give you financial and taxation advice all year long,

➡ 4. Assist you in finding the right deductions, adjustments, and tax credits applicable for your situation.

➡ 5. Get your state tax refund or IRS tax refund, fast with maximum amounts.

How do tax refunds work?

Tax refunds occur due to various reasons. Most commonly, it happens when you have over paid your tax returns to the federal or state tax agency.

In case of employees, an over amount of money is withheld but from their paychecks every week.

This is because withholding only considers the tax but does not always take into account every credit and deduction that the employee is going to take.

If you are frequently experiencing the tax refund scenario, it means that you are overpaying your taxes every year.

Updating your W4 can reduce your withholding. All you got to do is file a revised W-4 form with your employer.

How much federal income tax is withheld from your checks is largely determined through the W-4 form.

If you claim more allowances on the W-4 form then the withholding will be decreased.


Now the question is: How would you know what amount of allowances to claim so that the resulting withholding matches your tax bill?


This can be a complex calculation but seeking a professional tax expert advice is the right thing to do here.

Ultimately, this will increase the money you receive in each paycheck but will decrease or possibly eliminate your tax refund at tax time.

In any case, tax refund can be a hassle and currently it is taking longer than usual to receive the refunds due to the pandemic.

Due to the worldwide coronavirus pandemic, the IRS has increased the tax-filing and tax payment deadline 90 days, now it is July 15.

At times, the taxpayer is eligible for refundable tax credits, which reduces the total amount of tax that the taxpayer owes to the government.

What are Tax Credits and how do they aid in tax paying?

Tax credit is an amount of money that is allotted by the government to promote a specific behavior that is in favor of everyone (govt. and individuals), such as using electronic cars instead of gasoline based.

Certain tax credits have certain values that usually depend on the type of credits.


Tax credits are granted to individuals or businesses operating in a specific location that government has made applicable for tax credit.

Individuals and businesses working in a particular industry or classified by profession, degree or nature of work also get a certain amount of tax credit, as approved by the government.

Most tax credits are not refundable, they usually reduce the tax liability but do not provide any money in cash if there is no tax liability left.

Tax credits are usually of three types:

➡ 1. Nonrefundable

➡ 2. Refundable

➡ 3. Partially refundable



Refundable tax credits are given as cash to the taxpayers.

To be eligible for tax credits, a taxpayer must meet the detailed and specific sets of qualifications that are laid by the government.

These qualifications usually include particulars like income level, size of the family, occupation type, investment or savings type, currently earned income and other specific situations such as location of the business or home.


 

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How will I get my IRS Tax Refund?

You will be required to file your tax return in order to receive your tax refund, owed to you by your state or the federal government tax agency (IRS).

Among other options, typically, a tax refund is made in the form of a personal check named to the individual or business, in the form of U.S savings bonds, or a direct deposit into the bank account of the taxpayer.

Normally, deposits are made earlier in 10 to 15 days after the taxpayer has filed the return, while checks take longer than that, but they also get issued within a few weeks.


Some key factors that decide when you will receive your tax refund

➡ 1. How early you filed for the refund.

2. If you are claiming certain credits (especially EITC and CTC) as well.

3. Whether the tax refund is filed through electronic file or sent by mail.

➡ 4. Whether there are any existing debts to the federal government that the taxpayer needs to pay.

The Child Tax Credit (CTC) and the Earned Income Tax Credit (EITC) might delay your tax refund.

Also, as per the IRS, taxpayers claiming credits cannot have tax refund issued until mid-February as a means to protect against identity theft and tax fraud.

It is usually made safe that all the legalities are followed and the taxes have been filed properly if you hire a professional service like Tax King.

Generally, as per the guidelines of the IRS, it is said that returns with refunds are processed and payments issued within 21 days.

However, for filing done via paper or mail, this can take much longer.


The IRS and tax professionals, both strongly encourage filing done via electronic such as email or IRS web portal.

The fastest way to get your tax refund is filing electronically and selecting direct deposit as payment option.

I haven’t received my IRS Tax Refund, when will I get my tax refund?

If you are one of the taxpayers who have not yet received your income tax refunds, then you can use

“Where’s My Refund?” app to check the status. It is available on IRS.gov website.


Prerequisites for using the online “Where’s my Refund” application by the IRS website:

➡ 1. Social security number or ITIN

➡ 2. Current status of your filing, (Single, Married, Head of Household, or Married Filing Separate)

➡ 3. The exact amount of your refund.

Aside from that, a professional tax service can help you get your IRS TAX REFUND, safely and quickly.


Consult with Tax King and get your tax refund fast and with maximum amount.

If you have submitted your tax refund filing via online, then wait for at least 72 hours before checking the status of your tax refund because the IRS website takes a good amount of time to be updated.

Once your filing is accepted, you will also receive an email from the IRS.

However, if you have submitted your tax return through mail, then as per the IRS, it will take approximately 3 weeks before you can check the status of your tax refund.

Note: The IRS can hold onto your refund if you have certain outstanding debts, for example, child support or student loan bills.

Paying any such debts on time will make certain that you get your entire refund and on time.

Note: It is important to realize that you have a limited time to claim a tax refund.


Usually, for most taxpayers, the refund must be claimed no later than three years from the time you originally filed the tax returns or within the next two years (24 months) of paying the tax, whichever is later.

Where is my state tax refund?

In order to check your state tax refund, just like IRS, you can go to the website of your state government tax agency.


You will need the same things for this type of tax refund status check:

➡ 1. SSN (Social Security Number) OR TIN (Taxpayer Identification Number)

➡ 2. The exact amount of your refund.

➡ 3. Your filing status.

➡ 4. Sometimes, your ZIP code and the year of your return.

Tax refund processing is different among states, refunds, however are issued any time between a few days to a few months after submitting your return.

It is taking and may take even longer than usual this year if your state’s government closed offices due to the coronavirus pandemic.



In order to avoid delays in your tax refund a few important things to consider:

The IRS has provided a list of common taxpayer mistakes, and that list includes typos and spelling mistakes.

If you have made any typographical errors in your filing process, it is likely that your tax refund might be delayed to a significant amount of time.



The errors include mistyping your SSN or your name.

The second type of error that you need to avoid is a mathematical error or calculation mistakes.

If your tax return has inaccuracies and poorly calculated returns or deductions, then that would mean your refund will be delayed.

This can be avoided if you consult your taxation with a professional tax expert.

The filing status that you mention while submitting for tax refund is important, you must enter the correct filing status and do not enter more than one status.

Status such as Married, Widowed, Head of household etc, can cause troublesome delays in your tax refund, if entered incorrectly.

Be sure to file your tax refund neither too early nor too late, because the IRS Software are optimized for tax forms after a particular date, so sending in too early can actually cause a delay.

While on the other hand, sending too late can add you to a swarm of taxpayers that IRS will likely be delayed in processing with.

Always remember, the fastest and most efficient way to get your tax refund is to file electronically and choose direct deposit.



How do I save money instead of getting large tax refunds?

It is possible to decrease the amount of the tax refund, the taxpayers can use the following one or more methods:

➡ 1. Using the W-4 form, adjust the amount of tax that the federal government withholds from your paycheck.

Taxpayers are more often encourage to do this in cases where their adjustments to income, exemptions, and deductions remain relatively consistent from year-to-year (meaning that they will spend and receive the same amounts of money throughout the year), also if government is consistently required to give a larger refund.

➡ 2. At times, some people are entirely exempt from state tax, in that case, they can check with their state income tax authority (New York – in this case) to see if there is a form that can be filled and filed, which would exempt them from state withholding their money.

➡ 3. Verify and double check some tax rates and adjusted gross income thresholds (this happens if taxpayers are nearing the bottom of certain tax brackets and some modifications have been made to the thresholds and / or tax rates)

➡ 4. Another useful tip is to take advantage of the medical expense deduction (that is applicable for medical expenses, it has now been imposed for tax years starting in 2013)

➡ 5. Increasing the maximum amount allowed saving tax-free for retirement.

Some people tend to increase their tax refunds, thinking of it as a savings account, so they can g22et money back each year.

One warning though, if you are getting large amounts of tax refund every year, then the IRS can get angry at you for not having correct withholding amounts and you can actually get penalized for this.

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What to do with your Tax Refund money?

While it seems like free money, be more prudent once you receive your refund money.

Treating yourself and spending that money on vacation might be tempting, however, if there are more important financial obligations that you have yet to fulfil, then being considerate here is the right thing to do.


The most important thing to do is to pay off your debts, experts suggest that staying clean of your debts can increase your cash flow and is one of the key factors in making anyone rich.


Paying off credit card balances and managing debts should be your priority.

Not to mention, if your emergency fund is getting short on fuel, it is better to boost it up rather than spending money for entertainment.

If you do already have an emergency fund then it is probably better to use some of that money to help reach your next immediate financial goals.

Consider your financial goals for the current year and coming year and use your tax refund to help you reach them.

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TAX AUDIT | WHAT ARE TAX AUDITS? GET EXPERT SERVICES IN NEW YORK CITY?

TAX ACCT – TAX & ACCOUNTING SERVICES IN NEW YORK CITY?

Tax Audit | What Are Tax Audits? Get Expert Services In New York City

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If you own a business or pay your taxes individually then you probably know that there is a possibility that the IRS (Internal Revenue Service) or State Taxing Agency can review your tax returns to verify whether all your incomes, expenses and credits are reported correctly and completely.

You may or may not have received a notice from IRS through an audit letter, a phone call or by an officer visiting the location of your business.

In any case, tax audit can be a scary situation, it might lead you to pay a lot of money. Unless of course, you have a company like Tax King to represent you legally.

This is where the services of Tax King will help you feel protected. It will be made sure that you do not pay your hard-earned money to the IRS without a strictly legal reason.

A lot of times, you feel confident that you have paid all your taxes correctly, yet the tax audit or may have a trick up his sleeve and could trick you into paying more than what you actually owe.

This is why it is vital to secure a representation from professional service like Tax King, even if you have not received a notice from IRS, it is better to consult a tax expert who knows the gimmicks that the IRS usually plays, so you are prepared well before a tax audit and know how to prevent an unusual scrutiny.

However, if you have received a tax audit notice from IRS or your state tax agency then it is definitely the most crucial time to consult the expertise of a tax representative.

Expert tax and accounting services can save you a lot of money, give you great financial, legal and commercial advice.

Especially if you live in New York, then you would know that there are more and more ever-growing liabilities from tax agencies such as IRS, the tax rules and regulations have evolved so much that there are taxation to be made on every penny you earn or spend. So get expert services in New York City.

IRS’s auditors are specifically trained to extract more information than legally required, and if you end up giving vital financial information of your business, then the auditor will find more reasons to make you pay up.

At this point, a professional service like Tax King can help you defend the attack from IRS auditors in the areas of Brooklyn, Bronx, Queens, Staten Island or Manhattan.

We got your back! And your front too. We have helped numerous taxpayers get through an IRS audit with minimal financial penalties.

 Even if you do have outstanding tax payments, we can find ways to reduce tax penalties, worst case scenario, we can even arrange for an affordable payment plan such as an installment agreement.

Tax problems are faced by everyone, we understand if you got too busy in your personal life, if you were dealing with serious medical concerns or if you were just short on money to pay back your taxes at that time.

All this is very common, and we are here to help you, even if you haven’t paid your taxes in years.

However, if you do owe back taxes to the IRS, do not completely ignore them. Before you know it, tax penalties and interest can accrue, creating a snowball of debt.

What type of tax audits are there?

A tax audit occurs when the Internal Revenue Service (IRS) decides to examine your tax return with more focus and verify that your income and deductions are correct.

The purpose of tax audit is to either verify information according to the tax laws, uncover fraud or mistakenly sent inaccurate tax returns.

Normally, your tax return is selected for audit when a part of your return that you sent is out of the ordinary. Typically, there are three main types of IRS audits explained below:

Mail Audits (Correspondence Audit):

In all cases, whatever the IRS decides to audit, you will always receive notification of it by mail.

It could be a very simple audit or complex one. An audit sent to you via mail is the simplest type of IRS examination and does not legally require you to meet with the IRS auditor in person.

In correspondence audits, the IRS usually requests additional documentation to substantiate various items that you report on your tax return.

For instance, if you claim $5,000 in charitable deductions, the IRS could send you a letter requesting some proof of your donations.

And there you go, submitting adequate proof will conclude the audit in your favor if the IRS is satisfied, it will get off your back.

Office Audits:

Then comes the office audit, it is an audit that is conducted in person at the local IRS office.

These audits are a little more severe and are conducted in-depth than mail audits

They usually include questioning by an audit officer about information on your return.

You will be asked to bring specific documents and information to the IRS office, such as the financial books and general records for your business activities or your personal bank statements and receipts.

Also, it is one of your rights to bring an accountant or lawyer to represent you at these meetings.

For that purpose, Tax King is here at your service in Manhattan, Bronx, Brooklyn, Staten Island and Queens.


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Field Audits:

The field audit is the most severe type of examination that the IRS conducts. Boy, you must have been naughty. Not to worry, if you have a friend like Tax King in your life, then such audits can be reduced.

In this type of audit, an IRS agent will conduct the audit at your home or the place of your business.

Normally, field audits are conducted when the IRS is questioning more than just a few deductions.

A field audit is generally very thorough and will cover many items on your return, possibly not what you imagined.


What happens as a result of such audits?

Normally, there are only three possible outcomes of an IRS audit.

In case if the IRS accepts and is satisfied with your explanations and the documentation that you provided, then there will be no change on your tax return.

And if the IRS suggest changes to your tax return, you can either agree to the changes or challenge the IRS agent’s assessment.

In the situation where you accept the changes, you will then sign an examination report or another form given by the IRS and establish some type of payment arrangement.

Finally, if you decide not to agree with the findings, you can set up a conference with an IRS manager to revie2w your case again.

Alternatively, you can request a formal appeals conference. These are your three options.

If you decide to choose services of a legal representation such as Tax King, we will first make sure to educate you with all the possible scenarios, especially you will be educated on how to avoid the tax audit in the first place.

Causes of Tax Audit?

Among other reasons, some causes of Tax Audits are:

➡ Failure to report income or sales.

➡ Failure to file a return.

➡ In case of excessive credits or any exclusions claimed on a return.

➡ Incorrect or misrepresented refund claims or returns filed.

➡ Differences found when the IRS compares a return to information they obtain from others such as the State Tax agency, banks, employers, and other businesses

➡ Results of previous audits conducted

➡ Any misuse of exemption certificates

Some commonly received mails from IRS are due to:

➡ You have a balance due that you need to pay to IRS.

➡ You are due a larger or smaller refund from the IRS.

➡ The IRS has questions about your tax return due to some ambiguity.

➡ The IRS needs to verify your identity.

➡ The IRS changed your tax return.

➡ The IRS needs additional information regarding a particular transaction or tax return.

➡ Delays in processing your return that the IRS needs to inform you about.

Typographical mistakes:

An audit can be engaged by something as simple as entering your SSN (social security number) incorrectly or misspelling your own name. Making math errors or entering data incorrectly can also cause a Tax Audit.

It is better to make sure everything is entered correctly. Or hire an external service to assist you with this.


Income not reported or reported incorrectly:

You might feel like not reporting the total income, leaving some numbers out, you know, to reduce the calculations’ burden.


But that might not be the best approach, as IRS receives copies of all the same incomes that you receive.


Even if your bank accounts are in foreign countries.

Aside from that, IRS keeps track of the history of your income, if there are huge discrepancies in the yearly income and if unfortunately, you do not have the supporting documents to prove the change in your income. Then you are in trouble.

Overstating and misrepresenting deductions:

If you paid money to a charity, or if you overstated your business expenses.


IRS will compare such expenses, any out of proportion incomes or last year’s return, will return to IRS acting out more severely.


If you did actually pay a large amount of money to a charity or church.


Always keep receipts. Any disproportionate amounts can arouse suspicion by the IRS. So do make sure that any business expenses that you report, should make sense and are accurate.

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Some more common reasons why an IRS audit triggers in 2020 are:

The software trigger:

The IRS has a computer program system that is called Discriminant Information Function (DIF) this software has been designed exclusively to detect anomalies in tax returns of taxpayers.

It scans every tax return that the IRS receives.

DIF is on alert for duplicate information, such as two people claiming for some dependent, as well as deductions and credits that are arbitrary and do not have proper foundations.


Earnings are too low or too high:

IRS examines mostly the individuals and business that are either earning too much, compared to some same type of business, same neighborhoods and same earnings. Or if they are earning too less.

 

Any income that has been overlooked:

If your tax return fails to include even one of the sources of income, then the IRS will trigger an audit.


Spending or depositing a large sum of money:

You do that, and IRS is at your door before you even return home.


Exempted tax deductions:

If you are self-employed, then you are probably entitled to numerous exemptions.

If any of those tax deductions appear to be more than normal, there goes your discretion.

You’ll be under the spotlight in no time.


Home-based businesses:

A lot of times, home based business owners do not understand the tax policies and laws.

And the IRS knows that, that is why such places are examined more often and more closely.

‘Cause people tend to misuse this facility and include their personal deductions in place for a business tax deduction.


Cash based business:

A business that gets you money in cash, is a red flag for IRS.

They tend to closely investigate such businesses because it is highly possible that such a business might not be reporting the income honestly and completely.

Your rights as a Taxpayer that you should know.

Among other rights, taxpayers have the right to know what steps to take to comply with the tax laws.


The Taxpayer Bill of Rights compels the IRS to provide taxpayers with unambiguous explanations of the laws.


There are several rights, which apply during tax audit as well.


The IRS communicates adequately to its employees and the taxpayers alike, that in US, the taxpayers have the following basic rights:

➡ A right to professional and courteous treatment by IRS employees.

➡ A right to privacy and confidentiality about tax matters, especially about the business.

➡ A right to know why the IRS is asking for information, how the IRS will use it, and what will happen if the requested information is not provided.

➡ A right to representation, by oneself or an authorized representative (such as expert tax service)

➡ A right to appeal disagreements, both within the IRS and before the courts.

Some Guidelines given by the IRS for the requested records:

In case of a tax audit, the IRS will provide you with a written request for the specific documents that they need for verification purposes. 


How to organize the requested records:

Organizing the records, you bring or send to the IRS will speed the process and prevent errors or misunderstandings.


It is advised that you organize them by year and type of income or expense, and include a summary of transactions in it.

It is always reminded by the IRS to only send them copies of the documents. But never the original.


Records that the IRS will usually request:

Every audit focuses on certain aspects of a return, but the usual kinds of records the IRS requests will be on the following list.


Keep in mind that no record can stand on its own. You must include the reason and circumstances of surrounding any document that you send.


Receipts: Present these by date and attach notes on what they were for and how the receipt has any relation with your business.


In addition to providing dollars paid or received for a service or product, a certain kind of receipts can prove mileage.


Bills: Include the name of the person or organization receiving payment, mention the type of service and the dates on which you paid them.

Canceled checks: Couple these with copies of the bills they paid and any applicable employer reimbursement.


Legal papers: Be sure to include a description of what that case was about, when it happened and how it relates to your business, credit or deduction. Some examples include:

➡ Divorce settlements including custody agreements

➡ Criminal or civil defense papers

➡ Property acquisition

Tax preparation or advice


Loan agreements: Always include a copy of the original loan in case of the following:

➡ Names of the borrowers

➡ Home mortgage statements

➡ Location of the property

➡ Financial institution making the loan

➡ Amount borrowed

➡ Terms (the number of months to pay)

➡ Settlement sheet

➡ If the loan was from an institution, include an end of tax year statement indicating interest paid

➡ If the loan was not from an institution, provide a statement from the payee indicating the interest paid that year as well as the payee’s address and Social Security number

➡ Provide a break-down of how you used the money

Logs or diaries: Logs and diaries often show the dates and locations of your travel as well as the business purpose and mileage.

They can also show gambling winnings and losses as well as dates and locations. These might include job-hunting activity and expenses.

➡ Previous tax returns.

➡ Brokerage statements.

➡ Retirement account records

➡ Pay stubs

You may want to contact an expert tax professional such as Tax King to review your documents and make sure you understand what the discrepancy might be due to which the IRS decided to investigate.

If you completed your taxes at home using an online filing service or through a tax compilation company, the tax professionals can provide an audit defense service for a fee.

Tickets: Travel tickets should be labeled with the business purpose for the trip and group them with other receipts from the same trip, keep everything organized. Lottery tickets help provide proof of profit or loss.


Medical and Dental records:

➡ Medical savings account statements.

➡ In case of insurance or benefits, a copy of a handbook or other statements showing benefit and reimbursement policies.

➡ Physician statements such as a doctor or routine medical checkup.

➡ Capital improvement records for medical purposes including appraisals of the property performed both before and after the improvements.

➡ Contract for attendant care.


Theft or loss documents:

➡ All the insurance reports providing details of the nature of the loss or damage.

➡ In case of the damage not insured, provide copies of fire department or police reports on the said loss, theft or accident.

➡ Include photos or video showing the extent of the damage (if available)

➡ Appraisal from a qualified adjuster (typically provided by insurance company) showing fair market value of the property before and after as well as an estimate of the damage.

➡ Brief explanation of the loss.


Employment documents might include uniform policies or dress codes, continued education requirements, W-2 reimbursement statements or policies. These are to be provided if required.


Schedule K-1: These are used to report each shareholder’s share of income, losses, deductions and credits when an S corporation files its annual tax return, they can also be requested by the IRS.

Source: https://www.irs.gov/businesses/small-businesses-self-employed/audits-records-request


How long does an audit take?

The duration of an audit varies depending on the type of audit; the severity and complexity of the issues; the availability or time required for availability of information requested; the availability of both parties for scheduling meetings; and your agreement or disagreement with the findings by IRS.

What to do if you don’t have the money or unable to pay?

At times, penalties and tax deficiencies can spike your tax bill to an unaffordable amount, but don’t worry, it’s not hopeless, and you can do one of three things:

Get an extension: You can call the phone number listed on the IRS bill and request for a short-term extension, but that is only possible if you are able to pay in full within 120 days. If not, then you have two other choices.


Monthly payment plan: You can go opt for the monthly payment plan, by going to the IRS website.


Monthly dues can be set up as automatic payments from a debit account such as your personal account.


Offer in Compromise: An offer in compromise is an agreement to settle the tax debt for less than the amount you owe. However, it is only possible if your earnings are lower than a specific number.


You’ll need to meet requirements such as proving financial hardship to be eligible.


That is all made easily possible, if you hire a tax expert professional service.


In New York, the IRS and taxing agencies are smart, and they tend to listen less and charge more.


A quick guide and walkthrough for the audit process is vital for someone who doesn’t have experience with the IRS.


That is why we recommend you to take the external assistance with tax king service when it comes to legal representation.


The odds will always be in your favor, this way. If you are in Brooklyn, Bronx, Queens, Staten Island or Manhattan, you can get expert tax services through Tax King, New York City