It can certainly sound like a scary word, but an “audit” doesn’t necessarily mean you need to raise the alarm or lose too much sleep. Audits are standard practice for the IRS. While most people will never be put in an audit situation, you can definitely get through it—and NSO & Company is here to help when you need us!
How the IRS Audits Work
Out of the 145 million individual tax returns filed for 2021, less than 1% will even be selected for audit. The percentage ends up being higher as your household income increases. There’s also the higher probability when your tax return includes an area of specific interest. The IRS will often want to take a closer look at sections that tend to be more unique for taxpayers, and if you’re high-income earner with some of those scenarios, your chances of an audit are going to go up.
That being said, the vast majority of tax returns are flagged for audits through an automated system and handled as “routine business.” And the audit itself will usually only focus on just a few areas of the return. So, although you aren’t going to be happy about the audit, it won’t exactly cover every nitty-gritty detail.
What’s more, just because you’re being audited, that doesn’t mean the audit is happening due to an error or concern with your return. It could just be completely random. There might even be an additional refund as the result of an audit, or even a “no change” outcome.
Next Steps for Being Audited by the IRS
If you find yourself being audited, you’ll want to stay up-to-date on all of the correspondence you’re receiving. Many of IRS notices are related to processing backlogs. Nevertheless, you’ll still want to have a good understanding of what’s being asked of you. Open each piece of mail, and respond to any IRS requests in a reasonable timeframe.
You’ll also want to keep good records each step of the way. Sharing these details with a tax professional will give you the reassurance you need that nothing is getting overlooked. You only need to answer the IRS auditor’s questions, though, so there’s no reason to complicate things by providing additional information. This can just end up distracted both parties.
Also, be sure to remain courteous throughout the process. Following the “golden rule” can definitely help get the issue resolved sooner than later!
Let Our Team Take a Look
Whether you have a complicated audit situation or it’s related to something routine for the IRS, the best defense is a good offense. You want to be in a good position to defend your tax return before any meetings with an auditor take place. Getting a good accounting firm on your side can help.
If you have any questions about what’s next for your IRS audit, please don’t hesitate to reach out to our team. We’ll take a look at your notices and then can advise you on the next steps to ease your mind. You don’t have to navigate this process on your own. Let us take the stress off your plate and get things settled quickly and efficiently!
