I'm being audited by the IRS-Now what?
Author: Dorothy Griggs, EA
How does the IRS decide who gets audited? The IRS uses a recently updated formula and scoring system to evaluate tax returns. If something seems out of whack- -like low income accompanied by extremely generous charitable contributions--the return is flagged for a more in-depth look. Simple math errors do not warrant audits. What does warrant an audit are things like taxpayers forgetting to report a source of income or getting paid as independent contractors and forgetting to pay your Social Security tax.
There are two basic types of audits. The most common are by correspondence. The IRS may request further documentation by mail. You should send copies only and always keep original records in your files...
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