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IRS Audits: Know What’s Fact and What’s Fiction


Posted in on August 31, 2016

No one ever wants to be audited. If you do find yourself in a position where the IRS is asking questions about your past returns or your company, you need to call a Maryland tax attorney right away. A tax professional will know how to respond to the IRS with the goal of minimizing or avoiding any possible penalties that could result from a finding that back taxes are owed. 

Getting professional legal help is very important when faced with tax issues, not just during the audit process. You should also get legal advice when preparing your personal or business taxes. Filing a correct return with help from an experienced lawyer is essential to avoid the potential stress of an audit.

Having an attorney will also mean you'll get accurate information, which is important because many people have serious misconceptions about the audit process or what triggers an audit.

Debunking IRS Audit Myths

Some of the myths and misconceptions that people have about audits include the believe that:

  • You are more likely to get audited if you electronically file your tax returns. Electronic filing is the most common way taxes are filed, and e-filed returns are less likely to have mistakes.
  • You will be audited if you amend your tax return.  The IRS says an amended return does not trigger audits.
  • IRS agents will show up at your home or place of business if they want to conduct an audit.  Most audits are conducted by mail.
  • The IRS won't use the phone to contact you.  While it doesn't email, the IRS does call.
  • Reduced audits are a good thing for everyone.  Reduced audits have resulted in less government revenue, making tax cuts less likely.  This is a bad thing, not a good thing.
  • Late filing of your tax return increases the possible risk of an audit. There's no evidence to suggest an increased audit rate for late returns.
  • Only wealthy people are audited. People at all income levels are audited.
  • Audits are always a horrifying process.   A 1998 restructuring to the IRS also changed the audit process, making it more consumer-friendly. Audits are still not a fun process. However, a tax lawyer can help make the process as easy as possible. 
  • Taking a lot of deductions increases the chance that you will be audited. Legitimate deductions should be taken, as they are permitted by tax law.
  • When you receive your tax refund, you no longer have to worry about the possibility of being audited. Audits can still happen even after a refund has been received.

While all of these things are common beliefs, they are simply not true of audits.  For example, just because you got a refund from the IRS does not mean that you are free-and-clear with no more worries of an audit. 

The IRS can and does go back and audit someone who has already been refunded. In fact, this is common because the IRS has a short time limit in which it must send a refund, but the agency has years to go back and conduct an audit. 

You need to have accurate information about your obligations to the IRS and the audit process so you can protect yourself and your estate from facing an unexpected high tax bill. If you are concerned about not fully understanding estate planning, probate, or IRS planning, you should get help from a tax attorney like Kevin Thorn. 

Your lawyer can provide you with the truth about audits and can advocate for you throughout the entire audit process.  Call as soon as possible before you become the subject of an audit. 

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