The chances of the IRS auditing you are generally not very high, but the fact is that it can still happen and, if you are among those who end up receiving a notice in the mail, you will want to know why this is happening to you and what you can do to reduce your chances of it in the future.
Below are some reasons why you might get audited by the IRS:
- Your return was a red flag: Oftentimes, individuals who are largely paid in cash or those who make substantial contributions to charity, are flagged for audits. Unfortunately, legitimate tax credits or deductions tend to show up as red flags and trigger audits. Of course, that does not mean you should skip the opportunity to take advantage of a legitimate tax break. Simply make sure that you maintain detailed records that will assist you in justifying your claims if you end up being audited.
- You did business with someone who was audited: We do not always know everything about whomever we choose to do business with, so while your records might be in order, simply being associated with another business that was audited might trigger your own audit.
- You filed late or not at all: If you file your tax return late, without requesting an extension, you will likely get flagged for an audit. Additionally, the IRS will penalize you by charging you a fee that equates to 5% of what you owe every month for up to 5 months. Failing to file a return at all, the IRS might file one for you, without any of the tax breaks you were entitled to.
- You are very rich: For those who file a return with W-2 forms and earn less than $200,000, the chances of being audited are less than 1%. How rich do you have to be to trigger an audit? In 2013, 12.1% of those who earned a million dollars were audited, whereas 17.1% of taxpayers who were in excess of $10 million were audited.
IRS & Tax Law Attorneys in Brevard County
If you were contacted by the IRS and are in need of legal assistance from an experienced IRS and tax law attorney, you need to get in touch with The Buchalter Law Group in Brevard County. Our legal team has handled thousands of cases over a span of more than three decades, helping individuals avoid potential penalties that could have left them facing financial difficulty.
Get started on your case and contact our office today at (321) 320-6088 to schedule your free case evaluation.