An Internal Revenue Service (IRS) letter is a document that a lot of people hope never to see in their mailbox. To make things worse, we want no communication from the IRS warning us of the possibility of a tax audit.
While there is no way to know for certain that you will not be inspected by the IRS, learning a few facts about these audits during the tax return submission process may ease your worries. These are some reasons for failing to give it a second thought during tax season. In such cases, you can get help from a professional. People in big cities like Bloomfield usually hire professionals for such services. You can contact a professional tax audit helper like a CPA in Bloomfield, MI if you need one.
Do not worry about tax audits for these reasons.
- You may face minimal audit risk.
Your chances of an IRS audit are substantially decreased if your income is in the middle or lower range and your taxes are easy. In reality, the IRS audited just 0.55% of uploaded individual returns between 2011 and 2019.
The IRS generally gives priority to high-income taxpayers when selecting auditors. For example, the IRS processed 8.9% of tax returns for individuals with incomes over $10 million between 2011 and 2019. It usually assesses excess earners because their refunds tend to be difficult, and the IRS tends to collect more from them, increasing the likelihood of an audit.
- A tax audit does not generally mean you are in trouble.
The IRS indeed has the power to audit individuals who are believed to have done crimes, but that is not always the case. Every year, the IRS audits certain segments of the taxpaying public as part of the audit process. You can be chosen by chance, even if you fulfill all the requirements.
- IRS tax audits usually target the previous two or three years.
You might be wondering about what would happen if the IRS investigated one of your previous income tax returns if you filed several over the years. Could you recall every detail of that tax season and locate the necessary tax forms?
Fortunately, audits of tax returns from ten years ago are not an issue for you. The IRS states that returns uploaded during the past three years are the subject of a great deal of tax audits. They have the option to look back further than three years if they discover a major error. Even yet, they rarely travel back farther than six years.
- Do not panic if the IRS audits you.
Certain IRS tax audits differ from what you may expect. Sometimes all the IRS needs is more details or a response about a specific problem. You must act as soon as you can in this scenario and move on.
