Tax Refunds & Advice

As you probably know, the IRS simply does not have the resources to audit each and every tax return that they receive. But guess what? Over the next few years this is going to become more common because the government is allocating more money for audits. After all, the US is losing billions of dollars due to tax related schemes and other issues.

When it comes down to it, you want to do whatever it takes to make sure that an IRS audit does not scare you. The best way to do this is to always make sure that your returns are 100 percent accurate. Additionally, you need to keep good records and hold onto them for a while. This way, if the IRS does audit you, you can work with them to prove that you have done nothing wrong.

What would you do if the IRS communicated to you that they are starting an audit? Hopefully this is something that you will never have to deal with, but you never really know. In most cases you should be able to handle this process on your own. If a tax professional assisted you with your return, get in touch with them as well. They may provide cost free assistance during the audit. And if not, they may very well be able to give you some pointers.

Even though your chances of being audited are slim to none, you never know when your name will be picked at random. As long as you are being 100 percent truthful and accurate on all of your tax returns, you have nothing to worry about. 

Every year, tax filers worry that the IRS is going to single them out for an audit. Are you stressing out over nothing? The fact of the matter is that only a very small percentage of individual tax returns are audited. Generally speaking, the selection process for audits is generated by a computer based model that looks at a set of norms or standards.

When the figures on your tax return differ greatly from the standards that the computer is using, your chances of being audited increase greatly. This is why it is very important to ensure that your numbers are correct no matter what.

Tax returns are grouped together by the IRS, and from there, those that will be audited are chosen. Of course, the IRS does not release information on the specifications and details that they use to break down these groupings. If they did, there would surely be a lot of people trying to “game” the system.

If you report a large amount of deductions or an abnormally low income, there is a good chance that you are going to set off a red flag. In turn, the IRS may contact you looking for an explanation.

Being audited is never fun. But with that being said, just because you are audited does not mean that you are going to get in trouble. Once again, if you are honest and do everything right the first time around, there is nothing to worry about even if the IRS does get in touch.

The IRS estimates that hundreds of billions of dollars have been lost by those who cheat on their taxes. For this reason, Congress has given the IRS a bigger budget for conducting audits.