Most people are somewhat uncomfortable with the word “scrutiny.” By and large, we don’t have much to hide, but still, the idea of someone or something examining any aspect of our lives with a fine-tooth comb is going to make us nervous. Nothing captures that fear like the idea of an audit by the Internal...
An IRS tax audit happens when the IRS examines your tax return to make sure you filed your taxes correctly. Specifically, it double checks your income and deductions to verify the accuracy of your return.
Few taxpayers are chosen at random for a tax audit. If you make up to $100,000 a year, your chances of being selected for an IRS audit are less than 1 percent.
There are three types of audits the government performs: mail audits, office audits and field audits. Mail audits are the most common; the other two types of audits are more thorough and take longer.
Sometimes tax audit candidates are chosen at random. In many cases, however, a red flag is cause for further investigation. Common red flags include not reporting all of your income, taking large deductions that don’t match up with your income and earning more than $200,000 a year.