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What might prompt a tax audit?

On Behalf of | Apr 30, 2022 | Tax Audits

After filing tax returns, most individuals in Georgia or elsewhere may either be left facing a need to pay taxes or awaiting a tax refund. However, there may be certain scenarios in which a similar process could trigger a type of investigation known as a tax audit. Those who face tax audits may benefit from knowing what might prompt a similar process and where to turn for guidance in navigating every stage of the subsequent examination. 

Possible triggers 

Tax audits remain a common concern for many and there may be various issues that might trigger such an examination. Experts indicate that cryptocurrencies remain a common trigger of audits as while such assets differ from tangible possessions, they are still taxed as property. Another common cause of audits may pertain to the presence of advanced child tax credits and the accuracy of tax documents in relation to such aspects. 

Net operating losses are another common cause of audits for business owners who file or amend claims on their taxes for similar matters. Experts also indicate that those who are self-employed or earn a high level of income may also be at greater risk of facing a similar situation. Tax audits could also affect those who seek early withdrawals from retirement accounts, especially if this amount is deemed taxable. 

Facing an audit 

Preparing for a tax audit can be a complex process and those who face a similar scenario in life might not always be prepared to handle the situation. Fortunately, there are attorneys who can evaluate the situation a person in Georgia is facing and provide insight on all his or her available options. An attorney can work with a client in creating a strategy to protect his or her interests and subsequently assist in navigating every aspect of the process.