An IRS audit can be a very frightening and stressful situation. Knowing
the IRS wants to take a second, closer look at your tax return, whether
it is the entire return or just a portion of it, such as expenses
claimed for meals, entertainment or travel, can be a very nerve-racking
experience.
At Tax & Business Solutions, we never advise any taxpayer to represent
themselves in an IRS audit, no matter how simple it may seem. Even if
you honestly believe you filled your entire tax return out correctly,
meeting with the IRS can be a very intimidating experience.
This is especially true if you have to experience a face-to-face audit.
Traditionally, however, the majority of IRS audits are done via
correspondence. In other words, most IRS audits are in the form of
letters asking for explanations of various tax items on a tax return or
requesting supporting documentation. The fact of the matter is that on
average only about one-third of all IRS audits are done on a
face-to-face basis with a revenue agent, tax compliance officer, or tax
examiner. In fact, according to the IRS’ 2007 Data Book, during fiscal
year 2007 (Oct. 1, 2006 through Sept. 30, 2007), only 22.49 percent of
all tax return audits were conducted in person, while 77.51 percent were
what are called correspondence audits.
More often than not, an IRS audit of a tax return will result in
changes to the return. Whether these changes are good or bad for the
taxpayer depends on the situation. The no-change rate, or the number of
returns accepted as filed after examination for fiscal year 2007 was 16
percent for correspondence audits and 12 percent for those returns
audited by revenue agents, tax compliance officers or tax examiners.
As for the likelihood of your tax return being audited, just keep this
in mind. There were 1,384,563 individual tax returns that were audited
during fiscal year 2007, out of a total of 134.5 million returns filed
in the previous year. That means that only one percent of all individual
returns filed actually received an IRS audit.
But what if you happen to be in that unlucky one percent? We advise
that you hire a professional to represent you. When you hire Tax & Business Solutions,
you can be comforted by knowing that our Tax Team has years of
experience dealing with the IRS audits. You can face an audit with
confidence when you know you have our Tax Team on your side.
