The Basics Of IRS Audits
Posted on: 16 April 2020
Tax season is almost always stressful and anxiety-inducing for most taxpayers. Not only are there so many forms to fill out, but there's always the risk of an audit once you've filed. However, there are a lot of misconceptions out there surrounding IRS audits that often leave taxpayers paralyzed in fear at the mere mention of an audit. Here are some things that you should know as you get ready to file your taxes for this year.
Receiving Your Refund Doesn't Mean You're Clear Of Audit Risk
Many taxpayers breathe a sigh of relief when they receive their tax refund because receiving that deposit often leads them to believe that they are in the clear as far as the potential for an audit. This isn't actually true.
The fact is that the IRS typically has up to three years from the time you file to audit your return. That means you might receive an audit notice a couple of years from now for this year's taxes. That's also why it's important that you retain your tax records for at least a few years.
Audits Aren't Invasive Nightmares
Sitcoms and movies often portray IRS audits as frightening, invasive procedures with an IRS agent rummaging through your files in your home or office. This isn't actually the way that an audit is conducted. In fact, most taxpayers who are audited receive an audit by mail, which means that you don't ever even meet with an IRS agent.
You'll typically receive an audit notice by mail that you'll be asked to respond to by a certain date. Sometimes, you'll need to make an appointment to meet with a representative at your local IRS field office.
However, the process is usually fairly simple as long as you have the supporting documentation for all of the figures claimed on your return.
Audits Aren't Particularly Common
Some people think that the IRS audits a large number of taxpayers every year, so it's only a matter of time before they are audited, as well. The truth is that less than one percent of taxpayers typically experience an audit. The numbers increase for higher gross income levels, but most average taxpayers won't likely experience an audit unless they've made a mistake on their return that warrants further investigation.
Talk with a local accounting firm today for more information about your tax preparation and audit services needs. In many cases, having your taxes completed by a professional also means you'll have audit support in the event that you face an IRS audit, meaning that you won't have to complete the audit alone.
To learn more, contact a tax consultant.
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