If you’ve received an audit notice from the IRS, it is likely due to one of the reasons discussed in the following article. TaxAudit audit defense reviews federal and state tax returns, helping taxpayers navigate the audit process quickly and successfully.
Regardless of how well-prepared your tax return was, there is still the possibility that your return will be flagged for an audit. The IRS can legally select any return for additional scrutiny even if there are no indications that anything was done improperly. That means that even though your return was mistake-free, you can still be audited.
The good news is: if your return was indeed entirely honest and mistake-free, the audit process will go smoothly and you will have nothing to worry about. Remember: the IRS is an overtaxed (pun intended) agency that doesn’t have time to scrutinize perfectly legitimate tax returns. However, it is highly probable that your return was flagged because the IRS spotted something suspicious or inconsistent, either in your return or in the information provided by someone who issued you a payment. If your return was chosen for an audit, it was likely selected after being flagged in one of five categories:
- Abusive Tax Avoidance. Your return was flagged due to suspicions that you engaged in abusive tax avoidance operations.
- Your business is a large corporation. Tax returns from large corporations are typically chosen for audits every year.
- High DIF/UIDIF score. A DIF (Discriminatory Inventory Function) formula is an individualized numeric scoring system indicating the likelihood that your return contains omitted or inaccurate information. A UIDIF is a score related to unreported income.
- Information discrepancies. If the income you reported doesn’t match the income reported by the entity that issued you a payment, your return will be flagged.
- Related examinations. If your business associates, investors, clients or any entities with which you have interconnected financial dealings have been flagged for potential abusive tax avoidance or other tax issues, your own return could be flagged.
If you received a notice from the IRS and are concerned about the possibility of paying additional taxes and penalties, get the assistance of an expert audit service before proceeding. While you might not want to enlist help, it could save you significant time and money in the long run.
TaxAudit Audit Defense Reviews Federal and State Returns, Defending Taxpayers from in Audits
If you want affordable and highly effective audit defense on your side, the team at TaxAudit offers decades of experience and expertise in IRS auditing procedures. For more details, please visit TaxAudit.com.