There are essentially two ways your return could be selected for examination. One is the infamous "Red Flags". These are not printed anywhere but when the tax returns have very high expenses without corresponding income that is a Red Flag. Tax returns claiming the Earned Income Tax Credit that show someone earning just enough Self Employment Income that allows the filer to get the maximum amount of EITC is a Red Flag. That sort of thing.
However, the MAJORITY of tax returns selected for examination are through the Differentiation process. All tax returns filed are compared against some "models" of returns on file on the Cray Supercomputers at the IRS Computing Centers. How "different" a return is from the model results in a "Differentation Score" commonly referred to as the Dif Score. A Dif Score above a secret number level qualifies a return to be eligible for examination. Then it's just a matter of "luck" whether the computer will select your return from amongst the millions of others eligible for examination.
what will happen if i do not show up for a irs audit
The IRS can audit a return up to three years after a return has been filed.
Yes, the IRS can, and will, garnish an income tax refund if money is owed from an audit.
audit reconsideration process letter
The process of an IRS audit pretty simple. First they check to see if all taxes have been paid, they give you a warning if all taxes are not paid, then they take you to jail if you fail to pay your taxes.
what will happen if i do not show up for a irs audit
The IRS can audit a return up to three years after a return has been filed.
For an IRS tax audit, you should speak with a qualified accountant and a qualified attorney. These professionals can best guide you through the process of an audit.
Yes, the IRS can, and will, garnish an income tax refund if money is owed from an audit.
The IRS has the ability to audit all equipment on aircraft during an official audit. Because of this, satellite navigational equipment that is present in nearly every aircraft is subject to audit.
audit reconsideration process letter
There are local CPAs that offer IRS audit help. The best of which is taxmasters. There at taxmasters, they solve your tax problems. They can be reached at txmstr.net, I believe.
The IRS has a few different ways to inform someone that they are going to conduct an audit. They'll send out the information through the mail, but they might also call and email. Either way, a person about to be audited will be notified prior to the actual audit.
There is no accwptable percentage. You must be able to substantiate each amount...what triggers an audit...lord knows..probably not 1 thing...and of course many are entirely random.
The process of an IRS audit pretty simple. First they check to see if all taxes have been paid, they give you a warning if all taxes are not paid, then they take you to jail if you fail to pay your taxes.
You can go to ehow.com and they help you to understand the process and what you can do during an audit. Not ever audit results in additional money needing to be paid so you should not stress.
There is no way to tell how much you will owe after an audit. Hiring an experienced tax audit lawyer can work through problems that may arise after the audit.