About Income Tax Audits

A Federal income tax audit is a review of your income tax return to determine its accuracy and truthfulness. Note that a tax audit is not necessarily an accusation of wrongdoing. By auditing you, the Internal Revenue Service (IRS) is basically allowing you the opportunity to prove or qualify the information you provided on your tax return.

For example, consider the Federal tax deduction for charitable contributions. If you’ve indicated that you donated $1,500 to the Goodwill charity, it is up to you to produce the proper documentation to support your claim — in this case, you would likely need to provide a receipt signed by the Goodwill Store’s employee/recipient, as well as an itemized list of what you donated and its value. If you need help assessing the cost of your donation, both Goodwill and The Salvation Army offer fairly detailed “valuation guides” on their websites.

Save 30% at E-file.com

While preparing your income tax return, it is important to make sure you actually qualify for the tax breaks that you claim. If the IRS notices any discrepancies or misinformation, it’s almost guaranteed that you’ll be audited. The IRS will bring into question your tax credits and tax deductions, and you will be expected to provide sufficient documentation to prove them. Those who cannot supply the proper evidence for their claims will have to pay the difference in income taxes, plus any late fees and penalties.

If you receive a notice from the IRS that you’re going to be audited, do not panic. Make sure you first read the letter in its entirety to determine exactly what they’re asking you to do. Note that there are several different types of tax audits and you need to figure out which one applies to you. Depending on your situation, you may want to consider hiring a Tax Audit Defense Representative to help you navigate your case.

Save 30% at E-file.com

There are some tax audits which are relatively pain-free. It may be as simple as providing your signature on tax form that you forgot to endorse, or sending in a tax form that you neglected to include ― this is referred to as a Correspondence Audit.

Other types of tax audits will require more effort to resolve. A Field Audit usually occurs at your place of business or at your representative’s office.  You will be asked to provide supporting documentation for the areas in question. Make sure that your income tax records are neat, thorough, and in order.

An Office Audit is held at the IRS office specified in the letter you received. In this case, you (or your representative) are required to attend a meeting where you’ll need to provide the specific tax information/documentation identified in the IRS’ letter. Bring only the documents and supporting information which have been specifically requested.

Save 30% at E-file.com

Within 30 days of an income tax audit, the IRS will provide you the opportunity to either agree with the auditor’s findings or file an appeal (within a specified timeframe).  If you agree with the auditors findings and you owe additional income tax, you must immediately pay that tax along with any interest or penalties due.

On the other hand, if you disagree with the auditor’s findings, you have the option of making an appeal with the IRS Appeals Office. If you still fail to reach an agreement there, you can take your income tax audit appeal to the U.S. Tax Court, U.S. Claims Court, or U.S. District Court.

When dealing with an IRS tax audit, it is very important to remember that you must respond within the time frame specified in the letter. To avoid getting audited in the future, do your best to keep good financial records and make sure the information on your income tax return is as accurate as possible.

Free Federal Tax Filing Online

Tagged on:     

21 thoughts on “Understanding income tax audits

  • March 11, 2016 at 6:24 am

    Inspiring queest there. What happened after? Good luck!

  • March 14, 2016 at 8:25 am

    Great blog you have here.. It’s hard to find quality writing like
    yours these days. I truly appreciate people like you!

    Take care!!

  • March 23, 2016 at 12:40 am

    Ialways emailed this weblog post pawge to all myy contacts,
    for the reason that if like to read it then my linos will too.

  • April 9, 2016 at 3:30 am

    I read this post fully on the topic of the difference of latest and previous technologies, it’s awesome article.

  • May 6, 2016 at 12:24 pm

    Awesome things here. I’m very happy to peer your article.
    Thank you a lot and I am taking a lok forward tto tuch you.
    Will you kindly drop me a mail?

  • May 6, 2016 at 7:21 pm

    What’s up to every one, the contents existing at thiis website are in fact amaaing for people
    experience,well, keep up the nice work fellows.

  • June 1, 2016 at 4:05 am

    Wow! This log looks just like my old one! It’s on a totally different subject but
    it has pretty much the same page layout and design. Wonderful chnoice of colors!

  • June 4, 2016 at 11:19 am

    I’ve read some good stuff here. Definitely price bookmarking for
    revisiting. I surprise hhow much attempt you place
    to create this sort of great informative site.

  • June 4, 2016 at 8:55 pm

    I know this if offf topic but I’m looking into starting my ownn weblog and was curoous what all is needed
    to get set up? I’m assuming having a blog like yours would cost a pretty penny?

    I’m not very web smart so I’m not 100% sure.
    Any tips or advice would be greatly appreciated.
    Thank you

  • June 11, 2016 at 8:52 am

    Wonderful blog! Do you have any tips and hints for aspiring writers?
    I’m planning to start my own site soon but I’m a little lost on everything.
    Would you suggest starting with a free platform like WordPress or go for a paid option? There are so many
    options out there that I’m completely confused ..
    Any tips? Thank you!

  • August 4, 2016 at 4:47 pm

    Admiring the dedication you put into your website and detailed information you offer.
    It’s nice to come across a blog every once
    in a while that isn’t the same old rehashed material.
    Fantastic read! I’ve bookmarked your site and I’m including your
    RSS feeds to my Google account.

  • August 5, 2016 at 8:26 pm

    With a lot of studying and effort, it is possible to turn into a profitable broker, although currency trading isn’t simple.

  • August 6, 2016 at 2:05 am

    At Trading School, the web currency trading knowledge is broken down by us into numerous classes based on your amount of knowledge.

  • August 9, 2016 at 7:52 pm

    Woah! I’m reaⅼly enjoying tһe template/theme ߋf this website.
    It’s simple, үet effective. Α ⅼot of timeѕ it’s difficult to gᥱt
    thɑt “perfect balance” betաeen superb usability ɑnd visual appearance.

    Ӏ must say tһat ʏou’ѵе done a amazing job with tҺis.
    Additionally, the blog loads ᴠery quick fⲟr me oon Chrome.
    Excellent Blog!

  • August 20, 2016 at 11:30 am

    That is really attention-grabbing, You are an overly professional blogger.

    I have joined your rss feed and look forward to in quest of extra of
    your fantastic post. Additionally, I have shared your site in my social networks

  • August 23, 2016 at 5:19 pm

    We’re a gaggle of volunteers and starting a brand new scheme in our
    community. Your web site provided us with valuable info to work on. You’ve performed an impressive process and our
    whole community can be thankful to you.

  • August 26, 2016 at 7:18 pm




  • August 28, 2016 at 4:35 am

    If you are going for best contents like myself, just pay a visit this web page every day
    for the reason that it offers quality contents, thanks

  • September 22, 2016 at 10:03 am

    The metropolis’s or state’s taxi enforcement fee requires that meters must be operable at ALL occasions so as not to cheat the general public.

Leave a Reply

Your email address will not be published.