Taxes can be a tricky business–not only for those of us filing them, but also for the state and federal agencies who receive and process them. The IRS has an obligation to check and make sure the tax returns it receives are correct; however, with millions of federal tax returns coming in each year, the IRS can’t individually check every single one. So, how do they choose which tax returns to audit?
The IRS relies on a variety of automated methods to double-check returns and select which ones will be audited. According to the IRS website, returns are typically audited based on the following parameters:
- Random selection
- Statistical screening
- Association with another return under investigation
In some cases, you may just be in the unlucky position of being picked out of the blue for an audit. In other cases, the IRS computer system may flag your return for examination if it stands out, statistically, from similar returns. In yet other cases, if your tax return is connected in some way with another tax return under review, your return may also be audited.
It’s important to know this information so you can be prepared if the IRS sends you an audit notice. Being audited isn’t a judgement or an automatic indication that you’ve done something wrong. It’s simply a notification that the IRS wants to take a closer look at your return and your records to ensure that all the information is correct.
Get Professional Audit Help
If you are audited, it can be very helpful to work with a tax professional who can navigate the process for you. They’ll help you understand what’s going on and advise you on the best course of action. If there does end up being an issue with your return, your tax expert can communicate with the IRS and advocate on your behalf to ensure a workable resolution.
For tax and audit assistance in Austin, the tax professionals at Taxation Solutions, Inc. are here for you. We can help you navigate the audit process so you can resolve it and move forward with minimal disruption. Call the Taxation Solutions, Inc. team today to learn more!