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Guides and Information on the IRS and State Income Tax Audit Process

Everyone has heard 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 an IRS tax audit. Whether you are currently being audited, or want information on how to prevent an IRS audit, you will find everything you need below. Avoid IRS Audit: Tips on How to Avoid Tax Audits

Everyone has heard the horror stories about tax audits. These are some tips to keep in mind when you are filing your taxes or doing financial planning to limit 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.

IRS Audit Tips: Advice on Beating & Surviving a Tax Audit

Two goals you should have when going through an audit are to minimize the financial impact of the audit and to prevent the IRS from investigating beyond the original items selected for audit. An audit is conducted based on tax issues that appear on your return. Going beyond this scope during an audit risks letting the IRS agent search for additional taxes. There are no clear cut formulas to an audit; an audit is more like a game filled with many different strategies. Working with a tax professional helps ensure minimal financial impact during an IRS audit.

IRS Audit Procedure: Guidelines for IRS Audits

Understand how the audit process works. Know how and why tax returns are selected for an IRS audit. Once a tax return is filed it will go through a series of computer programs to check for the likelihood of errors. Depending on the 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. Understand basically how an audit works and what to expect after the audit has been completed.

IRS Tax Audit Red Flags: Understand Who Audits & When

Audit flags are another name for factors that increase the score your tax return gets when it is processed by IRS computers or is reviewed manually by an IRS employee. For instance, despite your entitlement to make large itemized deductions, if they are bigger than your income range, it can prompt closer investigation from the IRS.

Many of these red flags can be avoided, while others cannot. Being aware of common red flags while completing your tax return can significantly reduce your chances of an audit. If some of these red flags cannot be avoided, remember to keep as much supporting documents for those items as you can to make your life easier if you do get audited.

IRS Audit Statute of Limitations: How Many Years Back Can IRS Audit Returns?

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 three different statutes that apply to tax returns being audited and they are based upon the severity of the “mistakes” that were made. Most of the time the IRS will only have three 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.

IRS Audit Statistics: Rates and Chances of Receiving Tax Audits

Statistically, the average person only has a 1% chance of getting audited. This 1% is only the average of all different income levels. Individuals that report higher income are more than twice as likely to get audited as people with lower income. Schedule C filers or sole proprietors are also 10 times more likely to be audited than those who are incorporated.

IRS Audit Letter: Understanding Your IRS Tax Audit Notification

The standard way for the IRS to communicate before and after an audit is through various IRS audit letters. Understand the various letters that the IRS will send you, what they mean, and what actions must be taken on your part after receiving one of them. It is important these notices don’t go overlooked because most of them will require you to take action.

IRS Audit Penalties: Possible Penalties from Adverse Tax Audits

If the IRS audits your tax return and finds some inaccuracies, you will most likely owe back taxes, along with additional penalties and interest. Find out some common IRS penalties and potential criminal charges you would be facing.

Tax Audit Help: IRS Audit Defense, Assistance & Representation

Do you need help defending against an IRS audit? The National Tax Debt (NDT) can help connect you with a tax professional to give you either audit assistance or audit representation. Working with 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.

Contact Us Today for IRS Audit Help

Call our friendly and knowledgeable tax relief agents at (800) 206-0951 if you need tax audit help.


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