What triggers an IRS audit is when the IRS has reason to suspect that the income or deductions you reported are inaccurate, they might issue a tax audit wherein you prove that the numbers you stated are truthful. IRS audits are costly to the government, and only a small percentage of taxpayers receive an IRS audit. The less money you make, the less likely it is that you’ll get audited—and an IRS audit isn’t something to be feared, just understood. Receiving an IRS audit doesn’t always mean that you’re in trouble with the IRS. In this article, we’ll cover and answer the main questions taxpayers may have about IRS audits. We’ll even provide free consultations with a tax attorney, so you know your options and avoid any tax or legal difficulties.

Tax returns older than 3-6 years usually don’t get audited unless what triggers an IRS audit is a good reason for them to think it’s worth the audit. Typically, the IRS wants to audit tax returns as soon as possible after they get filed. The statute of limitations for tax assessment is generally three years after a return gets filed or is due, whichever of those is later. You can agree to extend the statute of limitations for a tax assessment if the audit requires it.

What triggers an IRS audit is normally simple matters that are easy to resolve and require you to send documentation that prove the statements on your tax return and alleviates their concerns.

The IRS uses a computer system to scan every tax return it receives and crawl for discrepancies and things that don’t make sense between taxpayer returns of similar income. Claiming too many tax deductions and that you donated a substantial amount of your money to charity will likely result in the program placing a red flag on your return. You will also send out a red flag if you deposited or used a lot of cash and the income your reported doesn’t coincide. The system also compares your deductions to others of similar tax returns and looks out for numbers that are way beyond normal. As obvious as this may be—driving around in a Porsche and owning a big house in Miami while reporting $30,000 of earned income will likely get you audited.

Filing with a “professional” won’t necessarily help you avoid what triggers IRS audits, and if they push the envelope on trying to get you the biggest return possible, it may result in your tax return getting audited. Call our tax attorneys for a free consultation, where we can inform you of the options you have to avoid any negative legal implications with the IRS, and truly get you the best outcome possible.

Most IRS audits are no big deal; answer a few questions, send the information they want by mail, and go about your day. These correspondence audits may require simple documentation to bring closure to the matter. About a 5th of the time does the IRS demand someone to run to the local office for an in-person audit. In this case, you should seek legal representation. We can help, give us a call at (800) 603-3900 for a free consultation with our Miami IRS audit lawyer.

Most IRS audits may take from 6 months to a year to finish processing. The Statute of Limitations gives the IRS 3 years to process additional taxes on your return. If the unreported income amount is large enough, the IRS can extend the statute to 6 years. The IRS wants to conclude audits as quickly as possible, but delays may happen if additional information or documentation is required. It may take even longer if the IRS finds that you have several adjustments to make, or if you own a small business with a lot of cash involved. If for some reason the IRS penalizes you—including a penalty for fraud (which happens in less than 1% of cases), or if you appeal your case with the IRS—this can significantly increase the time it takes for the IRS audit to finish processing.

The possible penalties for failing a tax audit may include additional tax interests, civil penalty, fraud penalty, or criminal charges. The more severe the failure, the more stringent the penalty will be. Misstating asset values, underreporting your income, failing to comply with IRS policies, deadlines, and due dates—are some of the ways you can get a penalty on your IRS audit. The IRS will decide whether the error was due to being negligent and not taking proper care in preparing your tax returns, or if the error was due to fraud. In the case of fraud, you may be liable to owe almost twice as much in taxes among other penalties. If you have a penalty or are in fear of one, you will likely need representation; please call us for a free consultation with our tax lawyers—we have 175 years of cumulative experience helping people with such matters.

If you’re facing an IRS audit by mail or in-person—or if you have penalties, a tax lawyer will advise you of all the legal implications involved in your particular case and help you reach a much better outcome compared to going at it by yourself or with an accountant.

One reason a tax lawyer may be a better option is the attorney-client privilege; making a tax lawyer duty bound not to disclose any information in any client communications whether oral or written. We cannot testify against you, yet a CPA could be subpoenaed to testify against you in an IRS court case. Also, a tax attorney may have experience with tax settlements and how to achieve the most favorable outcome for you.

Hiring one of our lawyers is not expensive; we want to provide quality representation at a fair cost—and save you more money in the long run by helping you avoid tax and legal trouble with the IRS (something no one wants). Call us now for a quick, easy—and best of all, FREE consultation at (800) 603-3900.