How Can HNIs Protect Their Income From Recent Increase of IRS Tax Audits?

On: December 5, 2024

The Internal Revenue Service (IRS) is a unit that collects taxes from citizens and is an entity that checks and keeps balances which work to fight frauds and work on those matters where they need to check and ensure that an individual or a corporation is following the rule of the land and adhering to it by paying taxes. Under the Democrats in the present government, the IRS is focusing much more on complex partnerships and S-corporations, where, in instances, it has been found that they are being used to pass through the law and save on taxes. Hence, it leads to tax audits, and that can be troublesome for high-income earners. As per the announcement of the IRS committee in June 2024, a partnership company or a firm sometimes provides complex business structures and shows transactions that allow HNIs to avoid paying taxes, while the average Joe of the country follows the guidelines and pays taxes accordingly.  

The Role of Tax Resolution Firms in Front of a Tax Audit

Tax partners or firms that provide IRS audit representation can protect the clients who are dealing with such issues without making any illegal pathways to save taxes. For them comes the strong tax resolution attorney service that can protect the assets and amount of high-income earners.

What Areas a Tax Resolution Firm Can Solve for HNIs to Avoid Tax Audit

A tax resolution firm can work on complex tax disputes or help a client solve old cases and bring them to the settlement table, where they can close the case and pursue better business interests for the client. At the Leading Tax Group, one can get an experienced attorney who can deal with tax-related problems and a former IRS chief who is capable of handling the procedure of the IRS and can help a client in the settlement process.

• Guides to Avoid Balance Sheet Discrepancies

The first area where the tax resolution firm can guide an individual is to follow the actual figures of the balance sheet and to check what are the areas of discrepancies that can invite a tax audit. For example, a person not showing earned income or a hidden asset, if later discovered, can invite a fine and penalty.

• Preparing Tax Structure That is Less Complex

Under the partnership firms or the S-corporations that are operating in the country but headquartered in the tax heavens, the IRS keeps track of how often a person uses those shell funds to shift money. A tax resolution firm can provide a legal track record or a legitimate money trail which will keep the IRS complacent and can avoid the situation of tax audit.

• Helps a Client Deal With a Compliance Letter

A letter of compliance is such when a person comes under the radar of the IRS as they can identify some of the red flags in their tax report but have not yet started a full-blown audit. Here, a law firm group like Leading Tax Group comes that has a group of attorneys who can help the client take proactive steps that will remove the discrepancies from the filings. Hence, for a high-income earner, it’s best to stay protected and keep track of their net worth and how they are keeping that. Please feel free to share your insights with us regarding the discussion below in the comment section.