The IRS may audit a return for various reasons, including:
• Unusual deductions or credits that don’t align with your income level.
• Discrepancies between reported income and IRS records, such as mismatches with 1099s or W-2s.
• Excessive business losses over multiple years.
Some audits are purely random, meaning you may have done nothing wrong, but your return was selected as part of a statistical sample.
If you receive an audit notice, act fast. The IRS will request supporting documentation, which may include:
• Income records (W-2s, 1099s, bank statements).
• Expense receipts and invoices for deductions claimed.
• Business financial statements if you are self-employed or own a company.
• Mileage logs, charitable donation receipts, and home office documentation (if applicable).
Before responding, carefully review the tax return in question. Look for errors or missing information that may have triggered the audit. If mistakes exist, it’s better to acknowledge them rather than let the IRS discover them.
During an audit, you have the right to:
• Request more time to gather documents.
• Be represented by a tax professional or attorney.
• Appeal audit findings if you disagree with the IRS’s conclusions.
Understanding these rights can help you navigate the audit process with confidence.
• Don’t ignore the IRS notice – failing to respond can result in automatic penalties.
• Stay professional and cooperative – being confrontational won’t help your case.
• Keep detailed records every year – even if you aren’t audited now, future audits may require reviewing past tax years.
Final Thoughts: IRS audits don’t have to be a nightmare if you’re prepared. Stay organized, keep clear records, and seek professional assistance if needed. If you’ve been notified of an audit or want to proactively prepare for potential IRS inquiries, our tax experts can guide you through the process.
