In most cases, if you file a relatively simple tax return every year and don’t draw attention to yourself with an aggressive return you are not likely to receive and IRS tax audit. Everyone is familiar with the statistics about tax audits and how it is very unlikely to receive one in a given tax year, but over your lifetime it is more likely than not that you will get audited. Whether you are currently being audited, you want to prevent an audit, need help with an audit, or just want general information on an audit, you will find everything you need here on this page.
Everyone has heard the horror stories about the dreaded IRS tax audit. Here is a link to some tips to keep in mind when you are filing your taxes or doing financial planning to reduce your chances of getting audited. A basic understanding of how the IRS audit process works and what they look for can significantly reduce your chances of getting audited by avoiding the common mistakes most people make and end up getting audited.
Two goals you should have when going through an IRS tax audit are to minimize the financial impact of the audit and to prevent the IRS from investigating beyond the original items selected for audit. There are no clear cut formulas to an audit, an audit is more like very strategic plan to limit information given to the Internal Revenue Service and its auditor(s). These tips can help ensure minimal financial impact of an IRS audit.
Understanding how the IRS tax audit process works is key to a successful audit. Know how and why tax returns are selected for an IRS tax audit. Once a tax return is filed it will go through a series of complex computer modeling to check for the likelihood of errors and high risk areas. Depending upon what kind of errors the IRS believes you have made it will send a letter and say what kind of audit they are planning on doing.
The IRS has strict rules on when it can audit a tax return. Know when you can stop worrying about a tax return that you filed in the past. There are actually 3 different statutes that apply to tax returns being audited and they are based upon the severity of the “mistakes” that were made. In most instances. the IRS will only have 3 years to audit a return, but if you don’t hear from the IRS within 18 months, it is very unlikely that your return will be selected for an audit.
If the IRS audits your tax return and finds some inaccuracies, you most likely will owe taxes, along with additional penalties and interest. In some instances, the IRS will make adjustments to your return and still determine that you do not owe any additional taxes. Find out some common IRS penalties and potential criminal charges you would be facing.
Do you need help defending against an IRS audit? Understand how we can help connect you with a tax professional to either give you audit assistance or audit representation. Using a tax professional can significantly increase your chances of getting a better outcome. Audits are stressful and time consuming. Talk with a tax professional to see how they can help you and give you piece of mind that your audit will run smoothly.
**For more information on IRS Audits, visit the IRS.gov official website.