Audits
Every year, the IRS selects several individuals for an audit. An audit is a verification process the IRS performs on certain returns to ensure everything is in order. The reality is that very few people get audited every year. In 2010, only 1.1% of returns were examined.
If you or someone you know has been audited by the IRS, get expert tax filing advice by contacting the McAllen certified public accountants of Gonzalez and Arrambide, Inc. at 956-351-6537.
How the IRS selects returns to audit
In 2006, the IRS published a page on the IRS.gov website that details exactly how they determined which tax returns to audit. It comes down to these four factors:
- Computer scoring – Tax returns are “scored” using two systems – Discriminant Function System (DIF) and Unreported Income DIF (UIDIF). The DIF score gives the IRS an indication of the potential for change in taxes due, based on past IRS experience. The higher the score for either, the more likely the return will be reviewed.
- Information matching – The IRS receives the same W-2s and 1099s that you do. If they don’t match the information you provided, they investigate.
- Related examinations – Your friends and business contacts can include your transactions in their return causing an investigation. The reason is because if their return has a problem, the correction may involve your return. You may not be audited, but you may receive a request for clarification.
- Potential participants in abusive tax avoidance transactions – The IRS may get information about promoters of and participants in various schemes, and select a return for audit based on that information.
Contact us
If you have been audited by the IRS, you may be confused as to what you should do. If you need professional tax filing assistance, contact the McAllen certified public accountants of Gonzalez & Arrambide, Inc. at 956-351-6537.
