When it comes to taxes, there are few things that people worry about more than getting audited. While an audit by the IRS is absolutely a serious event that needs to be addressed properly, it is not the nightmare that many people make it out to be. Learning about common myths and misconceptions related to IRS audits can help you to put any anxieties you have aside and just deal with the situation appropriately.
E-Filing Results in Increased Audits
This myth has been around since the earliest days of e-filing, and it continues to be spread by many. While the IRS does not release details of what percentage of audits are done on e-filing returns vs paper filing, there is no evidence to suggest that e-filing increases the risk of an audit. In fact, most experts agree that if anything, e-filing would have a reduced risk of an audit because there is a lower risk of accidental mistakes.
Filing for an Extension Increases Risk of an Audit
Millions of people and businesses need a little extra time to get their taxes prepared and filed each year, which is why filing for an extension is so common. It is a myth, however, that filing an extension, or even just filing your taxes late, will trigger an audit. The IRS knows that there are many reasons why people need the extra time and that it does not indicate that anything improper is being done.
More Deductions Equals More Audits
There are a huge number of deductions that are available for individuals and businesses to take, which can dramatically reduce their tax burden. Unfortunately, many people believe that taking more deductions means that they are going to be more likely to be audited so they skip over some deductions for which they would qualify. Congress created deductions to benefit those who qualify, and the IRS has confirmed that as long as you qualify, more deductions does not increase the risk of an audit.
Getting Audited Means You Owe More in Taxes
While nobody wants to get audited, it does not automatically mean that you are going to need to pay more in taxes. During an audit, the IRS may find no errors at all, in which case there would be no changes to your tax burden. During the audit process, you may even discover that you missed some deductions and end up getting more money back. Of course, there is a risk that you will have to pay more in, but that is certainly not always the case.
Get the Legal Help You Need
While audits are not necessarily the nightmare that many people think that they will be, they are a very serious situation. If you are being audited by the IRS, it is a good idea to have an attorney at your side to ensure everything is handled properly. Whether you need a legal explanation of certain aspects of your taxes, or you want to negotiate a settlement for what you owe, a good attorney is invaluable. Contact our firm today to schedule a consultation to get the representation you need.
Robert V. Boeshaar Attorney at Law, LL.M.,PLLC
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