Here Are Some Myths About Tax Audits

You don’t need to worry about IRS audits at all. The audit is the most dreaded outcome of the tax filing process and the situation carries with it some unsettling mystique.

The standard nightmare has IRS agents with badges coming up to your doorsteps, or the agency or the agency seizing your personal assets. One of the common myths related tax audits is that the audit is a common occurrence. In reality, only one percent of filers get audited. That’s really a small percentage. Even though IRS audits only a small percentage of filed return, there is a chance the agency will audit will audit your own. The myths about who does or who does not get audited and involves some myths.

The looming myth here suggests the audit process is something you must be afraid of. The is that most people only respond to a few IRS questions. Even if you receive a paper from the IRS you must not break down into a sweat. The correspondence audit is the more common of the two IRS audits. The other is the in-person audit. The IRS will request an appointment with you to review some financial information. Most of the times it is a very simple problem to resolve. So, the IRS can send you a letter asking for information and refund because they lost the money on sale.

You have come across people who thought that relying on the tax service guaranteed a solid, mistake-free return. The easiest way for these places to compete is to advertise that they are going to get you the biggest refund.

Most people get excited about getting a refund. In fact, the tax payers don’t understand what they are claiming on their returns. Such steps trigger an audit, interest and tough penalties.

The IRS has revamped up the number of tax audits it does in response to the country’s economic woes. That means people shouldn’t think they’re in the clear if they don’t earn a lot of money. The IRS is doing audits across the board for all incomes. In fact, they have been hiring more people for that. Now, even though the IRS has increased the level of auditing, the number is a very small percentage of the returns filed.

Many people avoid taking certain credits and deductionsdenying themselves tax advantages to which they are entitled- because they believe or have heard that taking them will make them susceptible to an audit. Fear of an audit would cause people to hand money over to the government, money they were entitled to. However, only when the financial picture painted in the tax return stands out as typical or beyond common sense should someone be concerned about the audit.

The IRS abides by a statute of limitations of three years after the due date of the return.

For substantial errors, the IRS maintains it can go back to six years and recommends you keep most records at least that long. As per the experts, if the audit is happening, it will occur in the latter half of the three-year time frame. Generally, audits happen two years after you file. It takes a while for all these filings to get done and the computer to get through this process.

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