Getting a free pizza on your doorstep in New York is fun, but the same cannot be said for an IRS audit notice. It can make you rethink so many things over the years you might have done. But the truth is, it is not necessary that you are being audited because there is definitely something fishy going on in your filings. Sometimes, you get chosen randomly, too. Instead of getting scared, talk to professionals at CPA in White Plains, NY.
- There May Not Be Much of An Audit Risk.
If you have basic taxes and a middle-class or lower-class income, your chances of an IRS audit are much lower. People with higher and suspicious ways of income are the ones who often get looked into. Actually, from 2011 to 2019, the IRS audited 0.55% of submitted individual returns.
When choosing auditors, the IRS typically gives preference to people with higher incomes. For instance, for a few years, the IRS processed tax returns for people whose income exceeded a few million dollars. Because the IRS prefers to collect more from excess earnings and because their refunds are typically more challenging, it normally evaluates them, increasing the possibility of an audit.
- It Is Not Always Because You Have Made A Mistake.
While auditing suspected criminals is within the authority of the IRS, this is not always the case. As part of the audit process, the IRS audits specific taxpaying public sectors annually. Even if you meet all the qualifications, you might still be selected at random. Certain IRS tax audits are not like the others.
At times, the IRS only requires further information or a response about a particular issue. In this case, you have to take action as quickly as you can and move on. Consulting professionals should be the first step you take in these situations. They will show you the correct path through the entire process.
- Tax Audits By The IRS Typically Focus On The Preceding Two Or Three Years.
Thankfully, you do not have to worry about audits on tax returns filed eight years ago. Returns filed during the last three years have reportedly been the focus of several tax audits, according to the IRS. If they find a significant mistake, they can go back more than three years. If your taxes are in order and have always been in order, you have nothing to worry about. They rarely ever go back more than six years, even now.
If you have filed many income tax returns throughout the years, you may be wondering what would happen if the IRS looked into one of them. Could you find the required tax forms and recollect every aspect of that tax season? Contact the professionals today!
