Setting the Record Straight: Four IRS Audit Myths Exposed

Audits are easily the most feared outcome of the tax filing process, and this dread has given rise to myths and half-truths. This article examines four of the most common misconceptions about a procedure that happens to around 1 percent of filers.

Myth No. 1: Audits are a terrifying process

The truth is that satisfying an audit can be as simple as answering a few IRS questions. Most IRS queries are sent by letter to confirm information you have submitted. The matter is settled once you send receipts and other supporting documentation or a check for any extra money the IRS concludes that you owe.

In rare instances, you may be summoned to an in-person meeting to review certain financial details. This doesn’t have to send you into a cold sweat: some people even walk out with unexpected refunds after the audit is concluded.

Myth No. 2: Professionally filed returns will not be audited

Paying a professional tax preparer will not prevent you from being audited. Too many companies advertise that they will get their clients the biggest refund possible, and either make mistakes or commit outright fraud. The taxpayers frequently don’t understand what is being claimed on their returns and end up being audited and stuck with interest and heavy penalties.

Myth No. 3: Those in lower income brackets won’t get audited

IRS audits cover the entire spectrum of income brackets. But again, only a tiny percentage of tax returns filed ever result in an audit request.

Myth No. 4: Filing for certain deductions or credits will trigger an audit

A lot of people decline to take advantage of certain deductions or credits because they believe that taking them will bring them to the attention of the IRS and result in an audit. Home office deductions are often bypassed for this reason.

The reality is that there are no automatic triggers for an audit. Only returns that paint an atypical or suspicious financial picture raise red flags.

No taxpayer wants to be audited – but in many cases, the audit process is not nearly as bad as expected. If you’ve got questions about your tax strategy, I can help – give me a call today and let’s talk!

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Written by Desnoyers CPA

Desnoyers CPA

Known for her friendly, outgoing nature and her rare talent for financial foresight, Lydia Desnoyers has been serving individuals and small businesses in Florida since 2010. After earning her Master’s Degree in Accounting from Nova Southeastern University and her Bachelor’s Degree in Accounting from Florida State University, she became a Certified Public Accountant and a Certified Fraud Examiner.