Experts say not to fear IRS audit, give tips to avoid one
TAMPA (FOX 13) - Do you fear the taxman and a dreaded audit? Don’t.
The chances are slim Uncle Sam will want to review your federal return, which is due April 18. If previous years’ statistics are accurate, only a tiny sliver of tax filings will be audited.
“The vast majority, more than 99% in fact, of individual income tax returns skate safely past the IRS audit machine,” according to Kiplinger.com writer Kevin McCormally.
READ MORE ON KIPLINGER: http://www.kiplinger.com/article/taxes/T056-C005-S001-what-to-do-if-the-irs-audits-your-tax-return.html
Kiplinger says the odds of your return receiving a second glance break down to roughly one in 116.
Even if you are chosen for an IRS audit, your perception of the process will likely not match reality. Most audits are not nit-picking, face-to-face confrontations. Three quarters of audits are “correspondence audits,” which are completed by mail.
“The correspondence audit is so subtle some people may not even realize it's an audit,” said TurboTax.
TURBOTAX MYTHS BUSTED: https://turbotax.intuit.com/tax-tools/tax-tips/General-Tax-Tips/Top-5-Myths-About-Tax-Audits/INF18178.html
It’s also entirely possible for a correspondence audit to work in your favor. Kiplinger reported as many as 40,000 audits in 2014 resulted in refunds totaling more than $800 million.
Simple errors might raise a red flag for the IRS.
The agency says eight common errors include:
-Incorrect Social Security numbers
-Filing status errors
-Error in credits/deductions
-Inaccurate bank account numbers
How you file might be key to avoiding mistakes. The IRS says people who file paper forms (via the mail) are about 20 times more likely to make mistakes than those who file their returns electronically.
Fortunately, most taxpayers do not have to pay to file electronically. The IRS has a simple tool to see if you qualify for free eFile services: https://www.irs.gov/Filing/E-File-Options