The words "IRS audit" may be downright frightening to the average taxpayer. News reports of taxpayers who've had to pay back thousands or even millions of tax dollars doesn't do much to ease that fear. Since taxpayers are often afraid of audits, they may avoid learning the truth about the IRS audit process. Here are a few common audit misconceptions that can ensnare taxpayers.
As the filing deadline draws closer, many taxpayers realize that they won't be able to submit their returns on time. These individuals often turn to filing a tax extension to have more time to prepare their forms. Is this a wise thing to do? Does filing a tax extension make it more likely that the IRS will audit you?
If you have neglected to file an income tax return in a previous year, you may receive Audit Letter 3391 from the IRS. This notice, which is one of the agency's nonfiler letters, is only sent to taxpayers who have missed filing a federal tax return at some point. How can you avoid receiving this letter? What should you do if you get Audit Letter 3391?
The IRS sends Audit Letter 3172 to taxpayers who owe a lot of back taxes to the agency. Generally, by the time this letter is sent, the IRS has attempted to contact the individual a number of times without receiving a response. What does Audit Letter 3172 involve? Is there a way to resolve back taxes?
The IRS sends out Audit Letter 915 to taxpayers who have been audited by the agency recently. What is Audit Letter 915? Do you have to do anything after you receive it? How can you reduce the risk of receiving the audit form in the first place?
Each year, the IRS audits many taxpayers. These individuals always receive a written notice from the IRS explaining their selection for the audit. Does the IRS send out audit letters at a specific time of year? Is there anything you can do to prepare for an upcoming audit? How long does the IRS have to audit you?
Have you recently completed an IRS audit? If so, you're probably relieved that the audit process is over. However, you can still expect to receive notices from the IRS regarding your case. One of these notices may be Audit Letter 692. What is Audit Letter 692? What does it explain? What should you do after you receive a copy of this notice in the mail?
When taxpayers are selected for an IRS tax audit, they may have many common IRS audit questions and their biggest fear may be finding out that they owe additional income tax. For those who do, the agency may send a copy of Audit Letter 531 in the mail.
What is Audit Letter 531? What can you do if you receive Audit Letter 531? Do you have any recourse if you believe that your audit process has been completed incorrectly?
Why Does the IRS Send Audit Letter 531?
The IRS sends Audit Letter 531 as a notice of deficiency. This means that the IRS has completed your audit review and has decided that you owe additional federal income tax. Unlike Audit Letter 525 which may be used for an increased refund or an increased balance due, Audit Letter 531 is only sent out when the agency has decided that you owe more tax.
If you are unsure as to why you have received this letter, you should speak with a qualified tax expert who can review your account and explain the agency's findings to you.
What is on Audit Letter 531?
While the exact numbers and data will differ for each taxpayer, the basic information on Audit Letter 531 is normally the same. Be sure to look for the information that is most pertinent to your case, such as the dates of the tax year for which the return applies, the exact amount of the deficiency (additional tax owed), and the amount of any penalties that have accrued on the account.
Towards the bottom of the first page, you'll also find a short summary of the appeals process, which can help you understand how to request a hearing regarding your ruling. The IRS also lists a contact address you can use to request additional information by mail.
Can You Appeal an IRS Notice of Deficiency?
Just the thought of an IRS tax audit can make some taxpayers shake in their boots. In the past, the IRS conducted far more audits that it currently does. However, some people are still worried about the prospect of a "random audit". What are the actual odds of getting audited by the IRS?
