When tax season rolls around, few things are scarier than the risk of being audited. Whether you’re a business owner or a hard working employee, the thought of an audit can sometimes keep people from filing their annual return, or at the very least cause serious anxiety and procrastination. There are a lot of myths regarding IRS audits, and they often paint a very inaccurate picture of how the system actually works. Let’s examine a few of the most common myths and learn the truth of these matters.
Myth 1 – Audits are Only for the Rich
Certainly, there is a higher statistical chance of being audited if your income is in the six-figure range. However, the truth of the matter is that any taxpayer can get audited. In fact, some of the smallest business owners and those who are self-employed stand a higher than average chance of getting audited because the IRS knows these circumstances oftentimes lead to inaccurate returns. Don’t assume that a lower income will preclude you from any chance of an IRS audit.
Myth 2 – The IRS is Ruthless and Uncompromising
Oftentimes people will imagine an IRS audit resulting in the freezing of their accounts, seizure of assets, and a complete disruption of their day-to-day lives. This is one of the myths most often blown out of proportion, because, although your accounts could be in jeopardy if you fail to cooperate, the IRS first and foremost wants to resolve and close cases.
If you are audited, it’s best to work WITH them and have legal representation by your side. Be sure to follow the requests and deadlines put forth by the IRS. Most of the time, an audit will result in very little disruption to you if you fully cooperate.
Myth 3 – You Won’t Be Audited If A Professional Files Your Taxes
Filing taxes on your own can be complicated if you don’t have your paperwork in order and don’t read each form carefully. It’s true that you can be audited even for an honest mistake. To avoid mistakes, people often have their tax returns professionally prepared. However, people can be lulled into a false sense of security by having someone else do their filing.
You will have a better chance of filing an error-free return if you seek professional help, but it’s not a complete guarantee that you won’t be audited by the IRS. Remember, the purpose of an IRS audit is simply for them to correct and receive information that is entirely factual. Oftentimes all that is needed is one more document or a simple change for an audit to be completed.
Myth 4 – Once You’ve Received Your Refund You’re No Longer At Risk
Having a refund check show up in your mailbox might have you breathing a sigh of relief, but the influx of money doesn’t mean you can’t still get audited. If the IRS issues your refund more than 45 days past Tax Day, they are responsible for paying you interest. To get around this, they will issue your check, and then begin an audit after the fact if necessary.
If the IRS wants to audit your personal or business records and you aren’t sure what to do, please call The Law Office of Robert V. Boeshaar. We can help guide you through the process to make an audit as straightforward as possible.
Robert V. Boeshaar Attorney at Law, LL.M.,PLLC
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