Important info

Online tax preparation provides you with an easy and safe way to file your taxes. Some accountants have been using this online method to file for their clients for two decades. Between the IRS and some private tax services, online tax return filing has now been updated to accommodate the requirements of individuals as well as businesses.

1. Saves Your Time and Money
Online tax preparation saves your time and money. You will save your time because you can fill in your information using online software without writing all your information manually with your hand. You can save your money by paying less for online services compared to hiring a professional that might be unaffordable to you. You can also think of using free e-file services available.
By filing electronically, you can also receive your refund much faster within a couple of weeks. You can choose direct deposit option in order to get your tax refund deposited directly into your bank account. Filing electronically can save time for the IRS because there is less paperwork or they do not have to re-type your return file.

2. File Your Income Taxes Conveniently
Another advantage of online tax filing is you can file your tax returns conveniently from your home computer if you have access to internet connection. You can fill out your information using online software any time whenever you wish. Whether you use free online software or free/paid e-filing service, you will be able to deal with all your filing needs from your office or home.

3. Make Your Return File Errors-free
Online tax preparation can help you reduce errors because of the error-check feature in the software. Moreover, the software will calculate your mathematical totals accurately for you when you enter the right information. It will prompt you to correct errors before moving forward with the form submission. So, less errors means less chances for an audit and quick processing of your return file.

4. Claim Credits and Deductions that You Qualify for
Now you do not have to worry about which credits to take and which deductions to claim. The easy deduction search tool will help you find out and choose those deductions which will suit you. Claim the deductions suitable to your tax situation so that you may have less chances of being unnecessarily audited by the IRS.

5. Get the Fast IRS Income Tax Refund
When you choose to file your tax return online with direct deposit option, then you will get your refund directly into your bank account within as few as 10 to 14 days. Getting online refund is the fastest and safest way of getting your money back into your pocket.

I want to mention that this procedure is the common way, but my wish is to be known the presented material how is conducted a tax audit in Albania. So, let's begin...
Before beginning an audit, the auditors should inform the head of their audit office that neither they nor their relatives will influence on the impartiality and objectivity of the audit, on their judgment regarding the taxpayer to be audited. This means that continuously auditors should inform their superiors if a potential conflict might arise in the future.
The auditor or audit team charged with the duty to conduct an audit in compliance with the deadline specified in the program is introduced to the company to be audited and present the audit notice and respective program to the company manager. Besides the principal manager of the company, it is required that the head of finance and other relevant staff so considered because of their status in the company take part during the presentation of audit program.
The audit team writes down all the problems and concerns raised by the company managers and their employees during the presentation of the audit program and after they are systemized in the verification process.
Conducting the audit
The issues and methods discussed in this part apply to both complete audits and fiscal visits. The auditors should use their judgment to decide on the level and depth of the tests they have made on the company accounts.
Initial stage of audit
Auditor's introduction to taxpayer: The auditors introduction should be accompanied with the presentation of the Audit Notice registered in. The audit should be conducted in the premises of the taxpayer's activity and the auditor should also visit other premises if the activity is not exercised in one single premise. The auditor should always try together more information than the taxpayer has registered and declared. It is important that the audit is conducted when the appointed person is available.
Initial interview
In the first day of audit, the inspector interviews the representative appointed by the company. Obligatory verifications to be included in this interview will be done according to a certain Table of Procedures that exist in the same way as in other countries.
In the case of a partnership all partners should be interviewed. Of special importance is the interview with the company managers, assuming they are the ones who run the business. The following information should be obtained in these meetings:
• General description of the company
• Duties performed by each member of staff in the company
• Detailed information on the company objectives, especially with regard to profit rates and management and organizational forms the company has chosen in order to achieve its objectives
• Checking the accuracy of certain points regarding the information obtained which does not correspond to the information provided
• Identifying additional information required and the deadline for obtaining such information.
The range of problems to be addressed in the course of the interview are described more in details in the points included in the audit program which the inspector has to execute.
The questions and answers should be written in the auditor's notebook, which will provide the basis for the audit report and enrichment of the audit file. These notes are very important because they may be needed in the court to prove that they were written during the audit and the auditor can and must refer to them or ask to do so.
Verification of internal audits
During The interview the auditor should determine the level and effectiveness of internal audits conducted in the company. In order to be able to assess the effectiveness of the internal audit system in the company the auditor identifies the key elements of the audit environment, accounting systems and internal audits for this system.
Creating an opinion on documentation
In spite of the audit office where they are, the auditors should verify the accounts (bookkeeping) for a preliminary analytical review of the positions they want to verify in more details. The auditor should make an analytical analysis of how the bookkeeping is maintained step by step and alongside with the examination of justifying documentation. Such analysis is made in order to compare what is currently reflected with what should be reflected, based on other data. When the results of the analysis differ from expectations, the auditor can investigate these significant differences.
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Analytical analysis consists of three steps:
Step 1: Determining what is expected to be discovered and to what level will differences be acceptable.
Step 2: Determining the level of registrations/self-declarations
Step 3: Investigating unacceptable differences and potentials for evasion
After determining the differences the auditor call the managers of the audited company to provide the necessary explanations. Failure to provide convincing arguments and justifications for the identified difference constitutes sufficient reason to initiate the definition of the tax assessment.
Evaluation of results
Two possible results can derive from detailed analysis:
1. The test shows that there is a mistake and the auditor should look at the cause, look for another possible mistake and assess the effect of these mistakes on the declared tax obligation. Every invalid payment discovered is on indicator of fraud which requires further actions.
2. The test assesses the full effect of the detected disguise on the declared tax. There are a number of available methods and the most widely used is the method of the norm or the method of average difference. The test conducted and their results should be detailed and stored in the audit file to provide support for every assessment that might follow in a potential appeal in the future.
3. In this respect, the physical inventory is very significant for the test the inspector conducts. It is necessary to attend whenever physical inventories are made in order to make sure that the counting is correct and in compliance with internal audit measures and procedures applied by the company. It is necessary to proceed with tests on the quantities identified by the personnel in charge of counting and storing costs.
Furthermore, it is necessary to:
- compare the observed quantities by tests in inventory files and figures in the bookkeeping;
- make sure of the compatibility of units of measurement and counting that have been used;
With regard to ongoing work it is necessary to:
- compare their composition with the elements resulting from the inventory;
- compare the stages of their progress with the documents which make it possible to follow production.
In order to assess the inventory it is necessary to:
- examine the elements that serve to assess the gross value. In such case it is worth making sure that the assessment adopted to establish the gross value of goods simply implies these elements excluding all other elements like:
- Purchase price without VAT (purchase cost);
- Customs tax;
- Transport cost without VAT, i.e. costs incurred for bringing inventory elements to the existing location and condition;
- Direct costs for the inventory
- if the assessment is based on the real price, it is worth examining invoices from suppliers of the goods in question in order to make sure that the assessment is justified by the price without VAT reflected in such invoices; the same verification should be made for customs rights or transport costs presented to third parties. As regards the transport costs resulting from services supplied by the company and inventory costs, it is necessary to examine documents compiled by analytical bookkeeping, which can help to check whether the costs included in the gross value of these goods are justified;
- If the method of pondered average price has been used for assessment, it is necessary to verify whether the maintained price is not higher than the last purchase price;
- If it is possible to determine the value of every item or category, it is necessary to make sure that they have complied with these values and there has been no global assessment;
- If there have been any modifications in the previously used assessment method, we should make sure that such modifications will not affect the regularity of the balance, and if they do, then we have to specify how it will affect the result;
- Make sure that changes of the condition have been registered as gross value in the account "Changes of raw material condition" or "Changes of condition of goods".
Burden of proof
There are cases when the auditor cannot verify whether the completeness of sums in the accounting registers for the selected accounts. In order to prove that all items have been entered, the auditor should use other sources. It is necessary for the auditor to use his judgment as regards the accounts he wants to analyze until he has reached an acceptable result.
E.g.: (in order to test the comparison between incomes and property of assets from the licensed activity).
a) Does it turn out that according to the data, the economic activity covers the costs to create and increase property of fixed assts or liquidities, both personal or of the economic activity of the family, partners and company manager, or the economic results do not justify the value of this property?
b) Is property of assets in point a) owned by the company or their family members? In such case the investigation should extend further and cooperate with the structures of Investigation and Intelligence Directorate.
When the auditor asks for specific data, it is taxpayer's responsibility to gather the required information and present it to the auditor. The auditor should audit the presented documentation but he should not justify the taxpayer's lack of documentation on incomes and costs. The taxpayer should present the documentation as required by the fiscal and accounting legislation in order to allow the auditor to clearly determine its compatibility with what the taxpayer has filed in his declaration with tax office.
If accounting records and other fiscal documentation are considered legally incompatible by the auditor, it is up to the auditor to decide whether they should be completely or partly used for meeting legislation requirements. In such cases, if the taxpayer does not complete additional documents, the auditor should discuss with the head of office whether to adopt, according to legislation, indirect methods and improvise the real situation of incomes realized by the taxpayer in question.

Income tax returns filed by taxpayers are often incorrect. Sometimes they are incorrect due to simple mistakes, accidents, oversight, confusion, or misunderstanding of the law. Sometimes they incorrect due to gross negligence or reckless disregard of the law. And, sometimes they are incorrect because the taxpayer willfully and knowingly intended them to be incorrect in order to purposely pay less income tax. No matter what the reason, when incorrect returns are identified, they must be corrected, either immediately, or after the conclusion of any criminal proceedings that might be undertaken.

When tax inspectors or investigators confront taxpayers to inquire why the income tax return is incorrect and seek their cooperation to rectify it, the taxpayer will either be cooperative or not. When the taxpayer cooperates, it becomes much easier to determine how much true income the taxpayer earned, or which expenditures are truly allowable under the law, in order to arrive at the correct amount of tax. Cooperative taxpayers may provide their books and records or other documents, and assist the inspector or investigator as he attempts to determine how much additional income tax the taxpayer should pay.

When taxpayers do not cooperate, the inspector, or investigator, can be confronted with a serious dilemma. How can they determine how much additional income tax the taxpayer should pay, if any. They must resort to other methods to obtain the information necessary to calculate the true tax due from the taxpayer.
During a tax criminal investigation, the investigator is required to identify the amount of income that is not reported on the income tax return, and also identify any expenditures that are on the income tax return that are not allowed by law to be included on the return. It is usually not possible to be exact in determining the amount of income, nor is it necessary to identify the exact amount of unreported income. The amount not reported must be substantial, in relation to the amount reported, if any. Small cases, where minor amounts of income are not reported, are not the type of cases the tax investigator should identify and investigate. The tax investigator should always be alert to major cases using the criteria, in order to identify and document the amount of income that is not reported, or to identify expenditures not allowed by law that have been deducted on the tax return, the investigator must identify and gather evidence. This is not an easy task. When taxpayers do not cooperate, it becomes a very difficult task.

In the world of financial investigation, there are methods and techniques available for the investigator to actually re-calculate or reconstruct the taxpayer's true income and expenses, even without his cooperation, or even without his books and records. In fact, as the tax investigator enters the world of criminal justice, where taxpayer engages in fraud, and could therefore could face imprisonment, it is highly likely that taxpayers will cooperate less. Therefore, the tax investigator must become skilled in the use of the techniques available to re-calculate or reconstruct a taxpayer's income and expenses.

However, before these methods are explained, the investigator must fully understand what an income tax return represents, and how it relates to the taxpayer's books of account, commonly called books and records. The section that follows explains how the daily business activities of buying and selling relate to an income tax return. Although this section may appear to be elementary or basic, a review of the nature of an income tax return will clarify the use of the Specific Transaction Method of Reconstructing Income, the most common and effective method available to reconstruct a taxpayer's income, when the taxpayer does not cooperate.
Income tax returns filed by taxpayers are required by the Income Tax Law to contain a summary of all financial transactions the taxpayer engaged in during the tax year. The summary should include all transactions where the taxpayer incurred an expense or other deduction allowed by law through an outlay or expenditure of funds. It should also include all transactions where the taxpayer received or otherwise earned money from selling a product or service.

In general, when the total of all transactions where funds were received exceed the total of all transactions where funds were expended, the taxpayer has a net profit, which is the amount upon which the tax is based. When the total of all transactions where funds were expended exceed the total of all transactions where funds were received, the taxpayer has incurred a net loss, and no tax is required to be paid.

Of course, each specific expenditure must be allowable under the law in order to be included on the income tax return, and each specific receipt of funds must be taxable under the law in order to be required to be reported on the income tax return. Expenditures incurred that are not allowable under the tax laws should still be reported in the taxpayer's books and records, but must not be included on the income tax return. Similarly, the receipt of funds that are not classified as funds subject to tax, should be reported in the books and records of the business, but not included on the income tax return.

In addition, under the accrual method of accounting for expenses and earnings, some expense items may be included on the income tax return even though no actual expenditure was made, and some items may be included as income, even though no funds were actually received.

If the taxpayer engages in specific financial transactions during the year that are required to be included within the summary of expenditures and receipts, but are not, then the income tax return is incorrect.
For example, if the taxpayer engages in a financial transaction where he sells a product or service but does not report the receipt as gross income or gross revenue, then the income tax return is incorrect. Similarly, if a taxpayer includes on his income tax return a financial transaction where funds were expended on a product or service that is not allowed to be deducted under the tax law, the return is also incorrect.

The income tax return is required by law to include all specific financial transactions related to determining a profit of loss. When certain, specific transaction are not included, the tax investigator must be able to identify which specific transactions were not included, and seek to gather evidence of the source and amounts required to be included. Identifying which specific transactions were not properly reported is known as the Specific Transaction Method.
Other methods of re-calculating or reconstructing a taxpayer's true net profit or loss are based on the sum total, or aggregate of all transactions the taxpayer engaged in during the year. These methods do not identify specific transactions of buying and selling. Instead, the net profit is calculated or reconstructed based on the total of all expenditures made, or the total of all funds deposited into bank accounts.

One such method is known as the Net worth Method. This method measures the increases in a taxpayer's net worth between years. Net worth is the amount of assets a taxpayer has accumulated that exceed the amount of liabilities he has accumulated. Increases in net worth are the result of the taxpayer spending money to increase the amount of assets he has, or to reduce the amount of debt he has. In addition, a taxpayer's expenditures that have no lasting value, or do not increase assets, such as expenditures for costly airline tickets for personal vacations, are identified and added to his increase in net worth.

The increase in net worth from one year to another is compared to the amount of income reported on the income tax return. Increases greater than the amount of income reported can be attributable to the taxpayer failing to report all his income, because no one can spend more than he earns. The excess is charged to the taxpayer as unreported income. Of course, adjustments must be made, as described in the text that follows, for loans, gifts, inheritances, and other sources of funds that are not taxable.

Another method is known as the Bank Deposit Method. This method compares the total amount of funds deposited into all bank accounts during the year with the gross receipts reported by the taxpayer on his income tax return. Bank deposits that exceed gross receipts are charged to the taxpayer as unreported income. Again, certain adjustments must be made, and other requirements must be met before the excess can be called unreported income.

The Specific Transaction Method is the most commonly used method and the most easily understood.
All three methods, however, have one common thread. All three require the tax investigator to follow the flow of money, from one person to another. This is accomplished by following the paper trail that financial transactions leave. When products are sold, goods are purchased to be consumed in the course of business, or when services are provided, often based on a contract, records generally exist that reflect the nature of the transaction, particularly if the amounts are large. Such records include purchase orders, sales receipts, inventory lists, invoices, deposit slips, bank statements, etc. By following the money, the tax investigators will encounter individuals who can become witnesses who will ultimately produce the evidence the investigator needs to document his case and establish the taxpayer committed a crime under the Income Tax Law.
Smaller businesses may not maintain books and records, which would increase the difficulty of addressing non-compliance. Other methods are available to address these types of taxpayers. One common method is to impose an annual license fee on small businesses, instead of requiring an income tax return. Such a method greatly reduces the administrative burden necessary to collect a small sum of income tax.

Choosing a structured settlement investment as an option for for financial gain can be a viable method of acquiring profit. These settlements are usually paid out to individuals over a period of time and may be the result of an insurance pay out, lottery winnings, annuities or a court judgment. Recipients of these funds are often willing to sell the payments in exchange for a lump sum of cash. There are a variety of reasons why an individual might choose to do this. Receiving money that is owed over time in small increments may not have the same kind of life changing possibilities that a one time payment of a large amount of money can have. This is the main attraction that draws individuals to investors who are willing to pay money for structured settlement payments. Why wait for the money when it can be obtained in one large payment? Of course, sellers will find that they are not going to receive as much money as originally would have been the case. For a structured settlement investment to work, there must be the potential of real profit down the road for the investor. These settlements may have been originally designed to create a steady source of income that will aide the beneficiary for a long time to come. This time frame will usually extend over a period of years. In the minds of some recipients, having access to a larger sum of money in the present is more valuable than having more money in the long run, but having to wait for it.

The decision to participate in a structured settlement investment can depend upon a variety of factors. Individuals who are weighing an offer to sell off any payments that will come in the future are generally more concerned about the present. Pressing financial needs can be very persuasive for the owners of these settlements. Mounting debts, needed home repairs, medical bills, or a child's education can be just some of the reasons that someone might decide to sell off future payments. But the wise seller will take a number of things into consideration. It is generally a good idea to seek counseling from an objective financial professional before making a final decision or signing any contracts. This professional should be functioning independently of any investors and have only the best interests of the seller at heart. Such counselors will usually help a client to understand just how much money will be lost should the client decide to move forward with a structured settlement investment. Advisers will also suggest certain pertinent questions to the client. How much money does the client currently need? Is this need so pressing that it is worth sacrificing future income? Is there any other way that the needed money can be obtained? Since the client will end us loosing a percentage of the settlement's worth, the seller should take the time to weigh all options and to decide if the future cost of the arrangement is worth the present day benefits.

A a structured settlement investment requires a little more than a willing buyer paired with a willing seller. While such arrangements can be a financial opportunity for both parties, the law does not allow individuals to sell off such assets without court approval. Involving a judge is designed to make sure that the seller fully understands what is being sacrificed and that the deal as it is presented is fair and equitable to all concerned. When the request is brought before the court, the seller's current situation and financial need will be presented as well. In addition to the input of a judge, separate legal representation may be called for. Many clients do not realize that they may be able to sell off only a portion of these settlements and are not obligated to sell the entire asset. This approach may offer a client the best alternative since they will be able to obtain cash for current needs while maintaining a portion of the payments that will be paid out over time. This choice can help to provide a sense of security for the future. It is also very important to make sure that the buyer or group of investors who are offering to complete the structured settlement investment are reputable and that there are no hidden fees buried in the agreement.

Selecting a reputable broker who can lead a client through the process of working with a structured settlement investment groups is a very crucial choice. A broker will need to be knowledgeable of the law as it pertains to these contracts. In addition, a broker must also hold the best interests of their clients as a top priority. The strength and comfort that God offers to believers is detailed in the Bible. "Fear thou not; for I am with thee: be not dismayed; for I am thy God: I will strengthen thee; yea, I will help thee; yea, I will uphold thee with the right hand of my righteousness." (Isaiah 41:10)

A structured settlement investment should benefit the purchasing company as well as the seller. These companies do not make such investments as a good will gesture to the seller. Like all investors, they are interested profit. For this reason, the amount of money that is paid to the seller will be less, sometimes substantially less, than the final settlement pay out. There may be fees and other costs associated with these contracts as well. What ever choice a seller might make, a fair contract will honor all concerned parties and provide needed financial relief.