LAWRENCEVILLE, NJ - Tax Audits Can Cost You Your Car, Your Home, Your Savings.

LAWRENCEVILLE, NJ - Tax Audits Can Cost You Your Car, Your Home, Your Savings.

There are 2 ways H&R Block can make your life easier, whether or not you're one of our clients, no matter what tax year.

What is an audit?

An audit is an inspection of an individual's or entity's books and records by the IRS. If you're being audited, the IRS will send you a letter stating which type of tax audit applies to you. There are 3 types of tax audits:

* Correspondence Audit - You don't need to physically see an IRS agent for this type of audit. The IRS will request documentation, and you can mail it to them instead of delivering it in person.

* Field Audit - If the IRS needs to verify information about your home or business, they may come to see it. Field audits usually involve businesses.

* Office Audit - You must be seen in an IRS office and provide requested documentation.


How to Prepare for an IRS Tax Audit

Always provide anything the IRS asks for within the requested amount of time. If you're asked to appear before the IRS, you should bring along your tax return and all of the supporting documentation for the tax year in question, along with anything else requested in your IRS letter. However, don't let the tax auditor keep any of your originals - always provide the auditor with a copy of everything requested.

If you're audited, there are 2 ways H&R Block can make your life easier, whether or not you're one of our clients, no matter what tax year.


TRENTON AREA H&R BLOCK OFFICES
Open Year Round

LIBERTY SQUARE SHOPPING CTR
2106 MT HOLLY RD
BURLINGTON, NJ 08016
Phone: 609-239-8491

Premium Office
SHOPPES AT FOXMOOR
1055 WASHINGTON BLVD
ROBBINSVILLE, NJ 08691
Phone: 609-490-0099

LAWRENCEVILLE SHOPPING CENTER
2495 US RTE ONE STE 14
LAWRENCEVILLE, NJ 08648
Phone: 609-912-0451

1. Audit Assistance is when we help a taxpayer understand the position taken by a taxing authority through an audit request and assist the client in preparing an audit response. This is a free service for current H&R Block Clients. Non-clients pay a fee of $75.*

Product highlights:

* Review the tax authority notice or inquiry and explain what it means.
* Help research issues involved.
* Assist the client in assembling documents and records for the audit.
* Explain to the client what to expect during the audit.
* Review the audit findings and explaining them to the client.
* Explain the appeal process and other options available to the client in the event the client disagrees with the tax authority's findings.

2. Audit Representation is when we communicate with the taxing authority on a taxpayer's behalf and represent a taxpayer in an audit proceeding. Only Enrolled Agents (those tax professionals qualified through the procedure outlined in Circular 230) can provide Audit Representation to a Client. This is a free service for H&R Block clients who've selected the Peace of Mind Extended Service Plan. For H&R Block clients without the Peace of Mind® Extended Service Plan or Worry-free Audit Support, a fee of $120 applies. Non-clients pay a fee of $200.**

Audit representation includes all services from Audit Assistance plus:

* Communicating directly with the tax authority on the client's behalf.
* Answering questions for the taxing authority about the preparation of the client's tax return.
* Acting on and asserting arguments on the client's behalf.
* Challenging the tax authority's position if necessary.
* Following up regarding any outstanding issues or further documentation that has been requested.
* Researching any issues that may come up during the audit.
* Meeting again with the tax authority to resolve any further issues.
* Negotiating and settling claims with the tax authority.
* Assisting with the appeals process.

What to Keep In Case of an IRS Tax Audit

You should keep your tax returns and any supporting documentation for your tax returns for 7 years. Supporting documentation may include:

* home mortgage statements
* Forms W-2 and W-2G
* Forms of the 1098 and 1099 series and Schedules K-1
* Receipts for employee business expenses
* Justification of fair market value (such as H&R Block's DeductionPro) for any items donated to charity
* Receipts for items donated to charity with value greater than $500
* Receipts for charitable contributions (including cash contributions made after 2006)
* Receipts for rental property income
* Brokerage statements
* Receipts for qualified education costs
* 401(k) statements
* IRA contribution records
* Receipts for items sold at a gain
* Home-office-related receipts
* Pay stubs
* Copy of the front and back of the check you used to pay your tax balance due, if applicable.


Which tax returns are more likely to get audited?

According to the IRS statistics, individual returns where taxpayers claimed the Earned Income Credit, returns with Schedule C, and returns with Schedule E or Form 2106 are more likely to be examined by the IRS.

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About H&R Block
H&R Block Inc. (NYSE: HRB) is the world's preeminent tax services provider, having served more than 400 million clients since 1955 and generating annual revenues of $4.1 billion in fiscal year 2008. H&R Block provides income tax return preparation and related services and products via a nationwide network of approximately 13,000 company-owned and franchised offices and through TaxCut® online and software solutions. The company also provides business services through RSM McGladrey. For more information visit our Online Press Center at www.hrblock.com.