“Audit” is a word that can strike fear into the hearts of taxpayers.
However, the chances of an Internal Revenue Service audit aren’t that high. In 2017, the most recent statistics available, show the I.R.S. audited 0.5% of all individual tax returns.
Being audited does not necessarily imply that the I.R.S. suspects wrongdoing. The I.R.S. says that an audit is just a formal review of a tax return to ensure information is being reported according to current tax law and to verify that the information itself is accurate.
Remember, this article is for informational purposes only, and is not a replacement for real-life advice. So make sure to consult your tax, legal and accounting professionals before modifying your tax strategy.
The I.R.S. selects returns for audit using three main methods.
There are a number of sound tax practices that may reduce the chances of an audit.
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