NIXA, Mo. – You may be happy tax season is over, but you might not want to move out of tax mode yet.
The IRS will soon be sending out audits.
Even if you filed your taxes on time, you may still be audited. A recent ProPublica article reports people who receive the earned income tax credit are more likely to be audited because some people claim the credit when they aren’t eligible.
A former deputy commissioner of the IRS told ProPublica, tax credit recipients were audited much more often than taxpayers making six figures, putting refunds on hold for lower income people who depend on them.
KOLR10 spoke with Benjamin Dickerson, a local tax preparer who says the season is coming up and you should be prepared.
“The IRS has a computer system that cross references all of the documents that have been sent by employers, banks, investment companies, things like that,” Dickerson said.
Dickerson says the likelihood of getting audited is different for everyone is and isn’t entirely dependent upon demographics.
Reasons you may be audited include random selection, computer generated selection (if the computer finds a discrepancy in filed forms) and if there are problems with other taxpayers like business partners you may have.
“You might be randomly audited,” said Dickerson. “There might be a document that you didn’t know you had, that was missing from the tax return. There also might be various credits that you didn’t know that you were eligible for, that you end up finding out about later, where you need to go ahead and amend that return.”
The best way to mitigate stress if you do get an audit in the mail is to keep all of your documents.
“The main thing you want to think about is record keeping,” Dickerson said. Every person wants to keep their records for at least three years, depending on the tax scenario sometimes it’s five sometimes its seven or more.”
Dickerson says the best thing you can do if you get an audit is to act on it immediately.
“So as soon as you get a letter, whether it says, ‘30 days, 60 days, 90 days,’ whatever the case may be, cause there is a variety of types of letters,” said Dickerson. “Get to a tax professional who knows how to respond properly to it. Don’t stick your head in the sand and hop e the problem is going to go away cause it’s not going to.”
In 2017, the IRS audited over 900,000 individual income tax returns.
Audits are expected to be sent out in late May or early June.
The IRS declined to comment on whether recent budget cuts will affect the number of people that will be audited this year.