Tax Audit Risks
October 6th, 2007
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Question: When does the IRS audit?
I filed my taxes with Turbo-tax this year, and before submitting, it gave me a message that I was at high risk of being audited.
I e-filed, and got a confirmation from the IRS that my file has been received.
My question is, when will I know if I am being audited? Could I get a refund, then months later be audited? Will it be before I get a refund?
Has anyone been audited that can help with this question?
All answers so far are awesome! Thanks! I want to add that I am entitled to the EIC, and that I have a small (tiny) business which has declared a loss in its second consecutive year, which I think could be triggers, BUT, I do have all the documentation to back it up, and also, the loss is very small (<$2,000) and much less than the first year. It's been a bad year, you know?
THANKS AGAIN!
Answer: The audit well after the tax reason. All they do at tax time is check the math and the table lookups and such. They don’t question anything at tax time.
This summer they will check to make sure all W-2s and 1099s and other tax forms issued with your SSN got to your tax return. If not, they will send you a letter asking why not. That is technically an audit – a correspondence audit.
Then 1-18 months after that, they may question anything else. Your number might be pulled at random. The might think some deduction was too high or that you were not entitled to it, and they will ask for prove.
Don’t sweat being audited. Over 80% are just done by the mail, where you have to send a receipt or answer how you got a number when they got a different number. Usually only people with businesses, rental income, sophisticated investments, or large amounts of deductions from income actually have to go in.
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