February 22, 2012

IRS Audit Facts: The Truth From The Source

No taxpayer ever wants to be selected for a tax audit. But if you are selected for an audit there are some facts you should know it.  Here are some true facts about the IRS audit process, directly from the source.

First and foremost, the IRS will never contact you, your tax preparer or your tax attorney via e-mail about an impending tax audit. IRS rules require they contact you and your tax preparer via phone or U.S. mail if you are selected for an IRS audit.

Let’s say that your tax attorney or tax preparer recommended you file an amended tax return. That filing will not affect the audit selection process of the original tax return. But be aware, the amended tax return also goes through the normal tax return screening process and could be selected for audit.

I’m sure the biggest fact you want to know about is how the IRS tax audit selection process works.  The first step in the audit screening process is they review your data against normal returns. The IRS uses statistically tax return models that screen out returns that stand out against the “norms”. These returns are selected as part of the National Research Program which the IRS conducts to update return selection information.

Once the tax return has been identified as a possible audit candidate, it is reviewed by an experienced IRS auditor.  The auditor can accept the file as is, or based on his audit experience, note the questionable item and forward the tax return for assignment to an examining group.

The hard cold fact about the tax audit selection process, is it comes down to a “human” (IRS auditor) decision.

If you are selected for a tax audit by mail or in-person, it is recommended you contact your tax preparer and/or a tax attorney for representation.

For more IRS audit facts, visit the IRS website.

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February 23, 2012
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IRS Audit Facts: Part II | True Tax Facts @ 11:43 am

[...] relieve the questions and what-if scenarios that go through your brain. In my previous post about IRS Audit Facts, I discussed how the IRS will contact you, what happens when you file an amended tax return while [...]

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