Reading the phrase “tax audit” may be enough to trigger your anxiety and cause your heartbeat to accelerate. However, the more you understand about tax audits, the more prepared you’ll be for an unexpected one, and the less overwhelming the process may seem. Here is what you need to know about today’s tax audits, based on recent tax audit reviews.
Tax audits are basically formal examinations that the Internal Revenue Service (IRS) conducts to verify tax-related information or even uncover erroneous tax returns and fraud. The IRS chooses returns to review both intentionally and randomly. If the IRS randomly chooses to look at your return, you can expect the government to simply verify that you provided accurate information for each entry on your tax return. Meanwhile, if the IRS intentionally selects your return for an audit, this is because the government has noticed possible fraud, issues, or errors in your return.
If you are chosen for an audit, you will receive a letter from the IRS. The letter will usually spell out the items the IRS wants to review with you. For example, they may want to assess additional taxes, or perhaps they believe a smaller tax refund is due to you. In addition, the IRS might have questions regarding your return, need extra information, or need to make sure that you are who you say you are, according to some of the latest audit defense reviews.
Other reasons for receiving a letter from the IRS include the fact that the IRS has changed your return or needs to let you know that your tax return will not be processed as quickly as you expected. Yes, suddenly receiving a letter from the IRS can certainly be nerve-racking. However, an expert in tax audits can help you to decipher what your particular letter means for you and what actions you should take to protect your best interests.