TaxAudit Blog

Category: Tax Audits and Notices

Tax Refund and Stack of Money Drawing in a Notebook

Now that you have received a notice from the IRS, you want to know if you are still going to get your tax refund. The answer is – maybe. Ler's explore more.

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Auditor writing on paper with binders on his desk

What can cause a tax audit? Let’s talk about some of the primary triggers that may cause you to receive an audit or other notice.

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Tax Audit written in blocks placed on $20 bills

Do we actually know what a tax audit is, why they exist, and what we can do to prepare for one? Let's explore the answer to these tax audit questions.

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Man looking at a letter

If you review the CP12 notice and do not believe it is correct, it is vital to contact the IRS within 60 days of the date on the notice to request an abatement.

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A tax audit is a formal examination of an income tax return. The IRS conducts tax audits to ensure the information on a tax return and amount paid is correct.

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Woman reading letter

The IRS will always notify you by mail if your tax return is selected for audit. The IRS will not initiate an audit by a phone call, email, or text message.

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We Will Win written on blocks

"Winning a tax audit,” simply means that you’ve paid the IRS no more than you rightfully owe. This is where the professionals at TaxAudit come in to help!

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Internal Revenue Service Sign on Building

If you have ever gone through an audit with the IRS or are just curious why the IRS audits tax returns in to begin with – you are in the right place.

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Person looking over paperwork

The gap between what taxpayers owe versus what they actually pay looms large. IRS audits are an attempt to collect the funds required to close this gap.

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Paper Stacks with calculator

State agencies who collect income tax can audit your tax return. One of the most common reasons for a state audit is the audit of your federal tax return.

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Penalty

You received an IRS notice CP162 in the mail. You are probably wondering why you received this notice and what it means – we are here to answer your questions.

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IRS Examiner

If you’ve been lucky enough to never receive a love letter from the IRS, you’ve probably wondered: What is it like to go through a tax audit?

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Tax Refund Written on Jar next to a Piggy Bank

The IRS sends out lots of different types of letters to taxpayers and one such letter is the CP21B. If you have received a CP21B letter, what do you need to do?

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Money and paperwork on a desk

Whether an amount paid for taxes as the result of an IRS or state tax audit is deductible depends on the type of taxes involved. Let's explore more…

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Tax Refund

You received an IRS Notice CP12 because the IRS corrected one or more mistakes they believe were made on your tax return. What do you need to do?

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IRS check with money surrounding it

Now that you have your Letter 6475, what should you do with it? The letter will inform you of the amount that the IRS paid to you for the third EIP payment.

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Tax Refund Ahead Sign

One of the best ways to check the status of your refund is on the IRS website. Your tax professional may also be able to give you a timeframe for your refund.

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Statute of Limitations

Generally, the IRS can take up to 3 years from the date you filed to review your return. In certain situations the statute of limitations can be extended.

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Definitely Worth It

Yes, TurboTax Audit Defense It is absolutely worth it. Those who have audit defense do not have to panic or make frantic calls upon receipt of IRS tax notices.

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Doing Taxes

The most important thing about having audit defense, in my opinion, is peace of mind. Your tax professional will help you navigate the waters of a tax audit.

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adding machine

The first thing to do when you get audited by the IRS is to not panic! It be scary but with the right tools and resources you will be able to get through it.

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1040 Tax Return

Absolutely! Now’s let’s chat about how and why audit defense works. Any taxpayer may be subject to receiving an audit or notice in the mail.

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Man reading a notice

Recently, the IRS sent many taxpayers  a confusing set of letters. The follow-up notice, Letter 6470, notifies the taxpayer of their legal rights to appeal.

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IRS

Rest assured the IRS has no advance knowledge that you have elected to have representation in the case of an audit through Audit Defense.

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Woman Thinking

You might be questioning if TurboTax Audit Defense is any good as you file your tax return through TurboTax. Yes, you want audit defense and it is worth it!

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definition

Audit Defense means you will have professional representation in the case of receiving an audit notice from the IRS or any state income taxing agency.

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Five Gold Stars

With over 1,700 years of combined Tax Professional experience, TaxAudit's Tax Pros have expert knowledge when dealing with the IRS and State tax agencies.

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Audit Blocks

The terms ‘audit support’ and ‘audit defense’ may sound like the same thing for the average taxpayer.  But in the world of taxes, they can be very different.

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Man reading a notice

I could not have been more pleased with TaxAudit services. I highly recommend this service for anyone who does their own taxes.

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Woman reading a letter

There are hundreds of different types of letters and notices you can receive from the IRS. Let's focus on a few of the more common IRS notice types we see.

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Question Mark

Put simply, your audit defense membership is valid as long as your tax return is eligible to be selected for audit or review by the IRS or State!

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attorney helping client

Well, the truth of the matter is that an attorney is not always needed but, in some cases, one is absolutely required. So, how do you know when that might be?

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red binder labeled audit

When you filed your tax returns through TurboTax, you decided to opt in and purchase Audit Defense. If you get a future IRS letter, how does Audit Defense work?

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Multiple Tax Returns

Your audit defense membership with TaxAudit provides expert representation for each tax return year for which you have a membership.

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Man reading a notice

Why doesn't my IRS account show I owe money if I received a Notice of Deficiency? A Notice of Deficiency represents an estimated amount due and isn't finalized.

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Pen that wrote a la carte

Yes, you can purchase audit defense a la carte on TaxAudit's website (www.taxaudit.com). TaxAudit is the leading audit defense company in the nation.

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Tax Professional going over audit letter with couple

When you purchase Audit Defense from TaxAudit, you’re purchasing more than just assistance with your IRS or state notice. You are choosing peace of mind.

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closed - out of business sign

There are several federal and state agencies that may have an interest in questioning a business’ operations, income, and expenses after it is closed.

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Tax Refund written on notepad

Most CP05 letters will not require immediate action on your part. Generally, the IRS does their review within the timeframe noted, and the refund is released.

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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

The latest news from the IRS regarding the amounts taxpayers are allowed to spend on necessary living expenses when owing the IRS is not for the faint of heart.

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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

The correspondence at the focus of my holiday lament is IRS Letter 4464C, otherwise known as the <em>Questionable Refund 3<sup>rd</sup> Party Notification</em>.

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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? Scarface went to prison for - of all things - 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. 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 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? 

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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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Audit Stamped on 1040

When your tax return is audited, the IRS will ask to see records and documents that show how you came up with the dollar amounts reported on your tax return.

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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.