What could trigger an audit?
Failing to report all your income is one of the easiest ways to increase your odds of getting audited. The IRS receives a copy of the tax forms you receive, including Forms 1099, W-2, K-1, and others and compares those amounts with the amounts you include on your tax return.
What happens if you get audited IRS?
Remember, you will be contacted initially by mail. The IRS will provide all contact information and instructions in the letter you will receive. If they conduct your audit by mail, their letter will request additional information about certain items shown on the tax return such as income, expenses, and itemized deductions. If you get contacted by phone, it is most likely some kind of hoax.
Should I worry about being audited by the IRS?
A tax audit doesn’t automatically mean you’re in trouble. While it’s true that the IRS can audit people when they suspect they have done something wrong, that’s often not the case. The IRS audits a portion of the taxpaying public every year. You can be selected purely as a matter of chance.
How common is it to get audited by the IRS?
Not very common. For one thing, your chances statistically of being audited are not likely. The vast majority of more than approximately 150 million taxpayers who file yearly don’t have to face it. Less than one percent of taxpayers get one sort of audit or another.
What are IRS audit red flags?
Some red flags for an audit are round numbers, missing income, excessive deductions or credits, unreported income and refundable tax credits. The best defense is proper documentation and receipts, tax experts say.
Does the IRS look at your bank account during an audit?
Yes. The IRS probably already knows about many of your financial accounts, and the IRS can get information on how much is there. But, in reality, the IRS rarely digs deeper into your bank and financial accounts unless you’re being audited or the IRS is collecting back taxes from you.
What do I do if I get audited?
- Understand the scope of the tax audit.
- Prepare your responses to IRS questions.
- Respond to IRS requests for information/documents on time, and advocate your tax return positions.
- If you disagree with the results, appeal to the appropriate venue.
If we prepared your tax return, call us. PS Tax Solutions provides complete accounting services in Tampa or Lutz. For more information, go to https://pstaxsolutions.com/ or call (813) 563-8724 for an appointment.