When you hear of investigations and audits into the very wealthy, you may wonder if they receive special treatment from the Internal Revenue Service. If you are an ordinary taxpayer or business owner in Ohio, and you undergo a tax audit, you may feel as if the IRS gives you no breaks, meticulously going over every last detail of your tax filings and their supporting documents.
According to one report, the IRS division that handles high-dollar taxpayer audits, known as the IRS Wealth Squad, only found taxpayers in 60 percent of the cases it investigates required a amend their filing. You might assume that when such a unit investigates, that it would have high expectations of locating discrepancies that would lead to recovering additional revenue.
It likely has a lot to do with the quality of the tax advice these taxpayers receive. Given millions of dollars of income, they probably are not bothered by spending a significant sum for tax planning and administration of their tax filings.
What they are buying, in essence, is insurance that if they are audited by the IRS, that all of the columns and rows on their spreadsheets will add up with precision and accuracy and that their tax planning will work out to produce the results they paid for.
The more complex your business and your tax filings, the more you need the help of tax professionals, both in the planning of your transactions and business structures and with the execution of your tax filings.
By avoiding cutting corners on the front end, you can greatly reduce the chances on the back end that the IRS will find anything amiss with your taxes should you receive an Information Document Request, which could portend an audit.