7 common Tax Audit Myths busted
When you consider the cost in time, brainpower, and resources that a tax audit may cause, we see reasons why so many taxpayers dread the idea of audits. They are scary, stressful, and generally regarded with a sense of impending doom.
An audit is a process that involves the IRS going in-depth into your tax documents to check for accuracy between the information presented on your returns and the actual facts and figures on receipts and documents.
When you get an audit notice, the next thing to do is to go through your documents and be prepared for the questions that the official assigned to you will want to ask you. An audit is not always bad news, it can be simple and straight to the point.
There are many misconceptions and myths that people have fabricated and believed over the years. These myths have even led some taxpayers to make wrong decisions concerning how they report their accounts to the IRS. Listed below are some of those myths debunked:
Common Tax Audit Myths
You are being audited because you have done something wrong
Many people believe that only the reason that they could possibly receive an audit notice is because they have done something wrong with their taxes. This is wrong. As a statement of fact, in many cases, the IRS just randomly selects the accounts to be audited. Although some audits come as a result of questionable compliance with tax regulations, many times, this is not the case.
A phone call about an audit is not legit
This is false. Although, many scammers posing as the IRS use phone calls to deceive unsuspecting taxpayers, not every call about an audit is a scam. The IRS can contact you through a phone call to tell you about an impending audit. You can protect yourself from scammers by refraining from giving any such caller your personal details. Listen to them then tell them that you will get back to them after calling IRS-verified numbers to confirm.
Claiming your deductions leads to an automatic audit
The thought of this keeps people from taking advantage of deductions that will help them reduce the overall amount of their tax liability. As long as your deductions are legit and you have documents to prove them, you have nothing to worry about. A deduction can only trigger an audit if it is an unlikely one that looks suspicious.
An audit automatically means you will have to pay more eventually
On the contrary, an audit can even make you richer. After the audit process, deductions, and refunds available to you may be unearthed and returned to you. An audit does not always mean that you will have to pay the IRS more money in unresolved taxes.
Filing an amendment increases your chances of getting an audit
An amendment is simply a situation where you try to correct a mistake you noticed on your previous return. When you file an amendment, the IRS will go through it but not with the aim of auditing you. As we mentioned earlier, there is no exact way people are chosen for an audit. It is done randomly many times.
Filing your taxes perfectly exempts you from an audit
We will debunk this by simply telling you that nothing you do makes your account audit-proof. You can get your filing done by a qualified professional and still get selected for a tax audit.
Only individuals with a high-income bracket get audited
Some people make the mistake of thinking that people who are low-income earners can not be audited. The IRS conducts audits across all levels of income. The amount you earn does not exempt you from an audit.
Have you received a notice of an upcoming tax audit? Do not panic. We are a tax relief firm dedicated to giving you the best results regarding resolving your tax debts. Our team of qualified professionals is available round the clock to provide you with the assistance you need. Contact us now at 888-585-8629 or 617-430-4674 or send us an email at [email protected].
For more information, email [email protected]