Your Common IRS Audit Questions Answered: Tips for Reducing Your Risk of Audit

Few things can incite fear quite like getting an IRS audit notice in the mail. Unfortunately, it does happen, and if you receive one, you will have to complete the audit process. For an ordinary taxpayer, this process can be daunting. If you want to minimize your risk, you need to understand the audit process. Here are a few of the most common questions people have about audits and what triggers them to help you be better prepared as you file your tax return this coming year.

Are Audit Selections Random?

You may have heard that many times taxpayers are chosen at random to undergo an audit. The truth is that most audits are actually triggered by the data on your tax return and your history with the IRS. However, that doesn't mean that random audits don't happen. In fact, there are a small number of taxpayers who are actually chosen at random most years to undergo an audit. These random selections are designed to help identify issues that may not otherwise be obvious during the review process.

Can Your Income Figures Trigger an Audit?

Your income figures can, in fact, trigger an audit of your return. There are two common reasons why this can happen. First, if you under-report your income when you file your tax return, the IRS will identify this. Remember that everyone you earn from will send either W-2s or 1099s to the IRS to report how much they paid to each worker. The IRS matches these forms up to the individual taxpayers, and if there's something missing from your tax return, they will either send you a notice of adjustment, or they will require you to undergo an audit.

In addition, those with higher incomes are more likely to be audited. In fact, the higher your income, the greater your chances of an audit. The same is true on the opposite end, though. If you are reporting a negative adjusted gross income on your tax return, that can often trigger an audit as well.

Are Math Errors an Audit Flag?

Sometimes, mathematical errors on your tax return can lead to an audit. While the occasional error will simply be adjusted by the IRS and addressed by sending you an adjustment notice, if you have a history of math errors, or you made several significant errors on your return, this can lead to an audit. Luckily, you can avoid mathematical errors simply by filing your tax return through an online service. The online service will do all of the math and eligibility calculations for you, so you reduce the human error factor.

No matter what the trigger for your audit, don't go it alone. Talk with an IRS representation service like Joseph Hanlon CPA about attending the audit with you and representing your interests.


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