Fewer situations are more intimidating than an IRS tax audit, especially when you're not sure what to expect. Unfortunately, this already-stressful situation is often made even worse by prevalent misinformation and myths, which can cause you to miss easy solutions or make mistakes that get you into trouble with the IRS.
Below is a list of four common myths about tax audits compiled by a law firm with considerable tax law experience.
4 Biggest IRS Tax Audit Myths
1. An Audit Means You're in Trouble
Many taxpayers assume that a letter from the IRS means they'll have to produce all of their receipts from previous years, go through a laborious process, and maybe even pay a penalty before the process is over. In actuality, most taxpayers will just have to answer a few questions, usually through the mail.
2. Having Your Taxes Done Professionally Prevents Audits
While reputable tax preparation professionals can help you avoid an audit, the tactics many use to maximize your refund can trigger further investigation by the IRS. Just because you've had your taxes done by a professional doesn't mean you'll be immune from an audit.
3. Audits Are Only for High Earners
While the percentage of filers who are audited is very small, the IRS does review the tax returns of people from all walks of life. Top earners do get audited in greater numbers, but the IRS also looks at middle-class and low-income taxpayers.
4. Audits Occur Immediately
Just because you haven't faced an IRS tax audit yet, that doesn't necessarily mean you won't. The IRS observes a three-year statute of limitations on most errors, with most audits occurring roughly one-and-a-half years after the returns in question were filed.
If you've received an IRS tax notice, Brian Kawamoto in Aiea, HI, has the legal expertise to eliminate your stress and achieve the best possible outcome. As a former IRS tax attorney, this law firm possesses unique insight that they will use to help resolve your legal issues. To learn more about their services or to schedule a consultation, visit their website or call (808) 486-6107 today.