The Internal Revenue Service could inform you of an impending audit a few weeks after you file your taxes -- or it could contact you years from now and tell you they have a concern with an old return. By law, the IRS has up to six years to audit a tax return, which typically happens if they decide special circumstances warrant a closer look at your filings.
Who Gets Audited
Anyone can get selected for an IRS audit, which essentially is an in-depth review of a tax return that raises questions for tax officials. While some audits are performed randomly, returns most likely to trigger an audit are those that appear fishy. For example, if you claim you made only $10,000 one year, but attempt to deduct $20,000 in charitable contributions, it’s going to signal a potential problem for tax auditors.
When Audits Occur
According to the IRS, most audits are conducted within two years of filing. If the agency decides to audit you, you’ll get a letter in your mailbox -- the IRS doesn’t call or email. The letter will outline which year’s tax return is being examined and what you need to do about it. In most cases, you’ll be asked to explain or verify some portion of your return that sent up a red flag for auditors. Depending on the issue, you might be able to reply by mail, or the IRS may ask for an in-person review of your tax information, which typically takes place at a local IRS branch office.
How Long Audits Take
How long an audit takes to complete varies based on the situation, how quickly you respond and how fast the agency is able to review and verify details associated with your case. You have the right to ask for an extension if you need more time to prepare. If it turns out you owe back taxes or are assessed any fees, the interest and penalties you’re charged will continue to pile up until the entire audit process is complete. In other words, if you owe, the faster the issue is resolved, the better the financial situation is for you.
Preventing an Audit
The best way to deal with an audit is to avoid the potential for one happening in the first place. File your taxes completely and on time. Keep detailed records related to earnings and deductions. If you can’t make a tax filing deadline, request an extension to buy you extra time. You may find it worthwhile to invest in tax preparation software to help ensure you are accurately preparing your taxes, or to hire a tax professional to do your taxes for you.
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Writer Bio
Lisa McQuerrey has been an award-winning writer and author for more than 25 years. She specializes in business, finance, workplace/career and education. Publications she’s written for include Southwest Exchange and InBusiness Las Vegas.