Chances are, you do everything in your power to avoid drawing the attention of the Internal Revenue Service when filing your taxes. We understand that certain things people report have the potential to raise a red flag with the IRS, though. When you pique the service’s attention, you run the risk of becoming the subject of an audit.
According to the Motley Fool, most IRS audits are not major causes for alarm. However, if there is anything you entered on your taxes that you were unsure about, it may come back to haunt you at some point during the audit.
The majority of today’s tax audits take place through the mail. In fact, about three-quarters of all audits simply involve the IRS requesting additional documentation and you sending it to the service. If you wind up requiring a more intensive type of audit, you may have to do it in person at a local IRS office. Conversely, you may have to go through a field audit, which is often the most stressful and time-intensive type of audit.
If you wind up becoming the subject of a field audit, there are several steps you may want to take to boost the chances of a favorable outcome. First, be courteous and avoid doing anything that might make it look as if you have something to hide. Second, avoid arguing that you made a particular move when filing your taxes because you have always done so in the past. You could potentially lead the IRS to take a second look at your taxes from other recent years, which could potentially lead to additional hardships.
IRS audits are often stressful, but they do not automatically signal major trouble.