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Tax audits by mail. The vast majority of tax audits — more than 75%, in fact — are conducted by mail. These audits are known as correspondence audits, and they typically come up when the IRS has questions or wants additional documentation to back up your return.
This post gives insight how the IRS selects individuals and companies for audit. The IRS uses a variety of methods to select returns for review: One of the ways the IRS selects tax returns for audit is by obtaining information about individuals or companies that promote or participate in tax avoidance transactions.
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Your return could also be selected for a tax audit. If the auditor that initially reviews your return thinks it is necessary to conduct a more thorough examination, it will be forwarded to an examining group and reviewed by a manager to determine if it is best to move forward with a full-fledged audit or accept the return as is.
In any case, your safest bet is to retain the services of a tax audit lawyer. I, Andrew Gordon, am available to help you with your tax needs, whatever your circumstances. Contact a tax audit attorney for advice on correct tax return preparation and how it can give you a better chance of avoiding an audit.
The IRS, however, has said an audit would not prevent an individual from releasing the returns. Corporate audits were down by 17% last year. Just 0.49% of corporations were audited, the lowest.
The process that the IRS goes through to determine whether to audit a tax return is far from random. The IRS knows what to look for, and can spot a return that is prone to having mistakes in it, making you vulnerable. Keep this in mind about your tax return: it is a map of your finances.
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But full-blown audits don’t actually happen all that often. The IRS is auditing fewer returns these days, mostly due to federal budget cuts that have affected staff size since 2010. Only 0.6 percent of returns earned extra, intense review in 2016. This was down from about 0.8 in 2014 and 2015.
So while the odds are in your favor that you will fall into the 99% of non-audited tax returns, there are some irs red flags that, IF YOU CAN AVOID, will help keep you from the audit pool group.
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