Most people start to cringe a little at the thought of an audit. While the chances of you getting audited are quite small, there is always that sliver of a chance that it could happen. It is enough to leave people worried. It often leaves people wondering how far back the IRS can audit a tax return. If you know the answer to this question, maybe it wouldn’t leave you feeling as uneasy? Mark Dicus & Company is here to talk about the IRS and how an audit works, including how far back the IRS can decide to reach for a tax return.
Is there a Statute of Limitations on IRS Audits?
For those looking for an answer to this question, the answer is no. The IRS can go back three years, six years, and in some cases, they can decide to perform an audit no matter how old the tax return is. They can go back to your very first tax return as a tax paying citizen under certain circumstances.
Will I Get Audited if I Made a Mistake on Tax Return?
If you aren’t a math wizard, it can leave you sweating when you’re doing your tax return. This is for good reason too. If there are any mistakes on your return, it can be a red flag for the automated underreporter system that the IRS uses. This is the system that is used to find any discrepancies in your return as they compare it to the same entities that send you copies of your tax forms. If the IRS looks further into it and sees anything that is suspicious, they may decide that they want to perform an audit to make sure.
What Increases Your Chances of Being Audited?
There are some people that have a greater chance at getting audited than others. Here are some of the red flags that leave individuals susceptible:
– Individuals that find themselves in a higher tax bracket
– Large losses when compared to the taxpayer’s previous earnings
– Those that have far too many deductions
– Those that have far too few deductions
– Anyone that claims they have a home office but uses the space for other purposes
– Taxpayers that make clerical errors
– Those that misrepresent their assets or property values
– Anyone that is missing a form
Tax Filing, Bookkeepers, Accountants & More in Summerlin, North LV, Henderson, Lone Mountain Village & Greater Las Vegas, Nevada
To protect yourself from an audit from the IRS, you need to make sure you keep any tax records, both hardcopies and electronic copies. You should also have proof of when your return was mailed or filed. Also, if you have receipts relating to your assets, you need to keep those handy as well. If you have any questions about an audit from the IRS, you can turn to Mark Dicus & Company to help you sort it all out. Call us today!