TaxAudit Blog

Category: Tax Audits and Notices

Audit Letters

Avoid the temptation to ignore the notice. In most cases, the IRS or a state agency may only need additional information to finish processing your return.

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IRS Audit Written on a Paper

The length of an audit depends heavily on the issues being addressed, the level of documentation required, and the Examination Division doing the audit.

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Audit

First and foremost, audit defense works by protecting you from the hazards and stress of facing off against the IRS (or a state tax agency) on your own.

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Person getting mail out of mailbox

The first step in preparing for that audit is reading the letter carefully. Audits rarely examine everything on the return, but only ask about specific items.

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Audit Defense Tax Professional

Audit defense gets you access to a dedicated tax professional who will develop a strategy and handle all communications with the IRS or state agency.

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Woman reading CP2000 letter from the IRS

If you received a CP2000 notice from the IRS, it helps to understand what it is and how to handle it. Here are a few essential things to know about a CP2000.

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IRS Auditor

Audits happen for many reasons, and while you may think a disgruntled neighbor ratted you out, the reality is most IRS audits are initiated for other reasons.

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Taking Mail out of a Mailbox

The CP2501 notice is just one way IRS asks you about the income you reported on your return and where they feel you may have omitted something.

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Audit stamped on a piece of paper with a gavel laying next to it

 Whether it’s an audit or a notice, receiving a letter in the mail from the IRS is most taxpayers’ worst nightmare. What can you do that will lower your risk?

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Tax Audit written on financial paper

A tax professional spends four to ten or more hours per audit - think of the time and stress you could save yourself if you purchase pre-paid audit defense.

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Tax Professional holding up a Calculator

Full Audit Representation through an Audit Defense Membership, is included at no additional cost. Other tax experts charge roughly $150/hour for representation.

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Tax Professional looking over tax documents

With Full Audit Representation, also known as Audit Defense, a Tax Professional will defend your tax return through the entire audit process if you are audited.

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Amended Tax Return on a keyboard button

Generally, amending an already filed tax return will not extend the time the IRS has to audit the return, which is normally three years.

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Estate Tax Return

The IRS generally has three years from the date the returns were filed to audit. However, in certain circumstances a return can be audited within six years.

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Football Play

On the IRS’s website is a list of Audit Technique Guides (or ATGs) that IRS examiners use as a roadmap when auditing various types of income tax returns.

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Tax Debt Relief

Millions of individuals and business owners in America currently have unpaid IRS tax liabilities. Here are a few items to consider for tax debt relief options.

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clock on an audit report

The fact is that there is no standard answer to how long it will take for the IRS to finish up your audit and tell you what, if anything, you owe.

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File folders - one with the word Audit on the tab

Responding to an IRS audit is not the easiest thing to do. Surviving an audit is much easier with professional representation.

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IRS Audit

Generally, the IRS has three years form the date the return is filed to conduct an audit. However, there are exceptions to this three-year rule.

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irs agent examining a tax return

Besides official IRS examinations, the IRS also conducts other types of tax reviews that are not classified as official audits, and these are far more common.

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Woman reading letter

A Notice of Deficiency (aka Statutory Notice of Deficiency, Stat Notice, 90-day letter) is the last letter the IRS sends before making its assessment of tax due

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Internal Revenue Service sign next to traffic light

Returns are being processed, and refunds are being issued. Things seem back to normal.

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Four Ice Cream Cones

So, what happens if you miss an Installment Agreement payment and/or can no longer make the agreed upon payments?

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Ice Cream Sundae

Of all the types of Installment Agreement requests, Streamlined Installment Agreements are the most varied and provide a bit of flexibility for the taxpayer.

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Woman on the phone holding nephew

When more than one person wants to claim a child on their tax return, sorting it out becomes complicated. Not only are there five tests to meet for a child...

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Colorful balls with numbers

Lottery earnings are generally reported on Form W-2G, taxed as ordinary income, and expected to be reported as “other income” on the federal tax return.

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Audit under a Magnifying Glass

​"Unreal audits" often require the same verification principles as traditional audits and incite the same level of discomfort as a real examination.

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Two bowls of ice cream

This blog post discusses the rules and fees regarding Guaranteed Installment Agreements for taxpayers whose tax debt is $10,000 or less.

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Bowl of Ice Cream

Sometimes it only takes six little letters to strike fear in the bravest of taxpayers: IRS IOU (technically, it's not an IOU, but rather a bill).

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Person receiving fast food

The IRS is currently offering this cash payment alternative at participating 7-Eleven stores in 34 states.

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Depart of the Treasury Letter

We have created a list of 5 quick tips on how to deal with any IRS letter you receive to help make the process as quick and painless as possible.

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$20 bill, American Flag, and Capital Building

Did you know that when you owe money to the IRS that cannot be paid in full within four months or within six years on a monthly payment plan?

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Taxpayer Advocate written on a blue piece of paper

The TAS is an independent organization within the IRS, created with the intention of identifying and resolving problem areas within the tax system.

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Four glasses

Part of the return review may include the IRS contacting other third parties in order to validate the information listed on the return.

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Block with Tax words on it

The letter you hoped would never come arrived. You open it and discover the IRS has graciously sent you an invitation to their work mileage deduction review.

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hat

What do “Scarface” Capone and a tax audit have to do with each other? They actually do have a bit of a connection. Scarface went to prison for TAX EVASION!

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Stock Chart

I got a CP2000 notice from the IRS. It says I owe $12,269 for securities I sold in 2013. I purchased the stock in 2005 and sold it at a loss of almost $10,000..

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Rx bottle that says Affordable Care Act

I received a 1095-A form for health insurance info from the Vermont Health Insurance Exchange/Marketplace after I had already filed my taxes.

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Internal Revenue Service building with traffic signal in front displaying a red light

If you get audited, do they send a letter or do they call you? In most instances, the IRS will send you a letter notifying you of the audit.

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Clock pointing the time hands towards the word TAX

The overall percentage of individual tax returns examined in 2013, published by IRS, is about 1%; however, this number only takes into account “examinations”

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man laying on grass relaxed

You may have heard that if you are self-employed, or you are expected to entertain clients as part of your job, you can deduct the costs of those meals...

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Tips

Here are some simple tips to help you reduce your audit risk: Proofread your tax return A mistake on just one figure or item can present IRS audit flags…

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This blog does not provide legal, financial, accounting, or tax advice. The content on this blog is “as is” and carries no warranties. TaxAudit does not warrant or guarantee the accuracy, reliability, and completeness of the content of this blog. Content may become out of date as tax laws change. TaxAudit may, but has no obligation to monitor or respond to comments.