801 West Bay Drive Suite 707 Largo, FL 33770

(727) 210-7795
marc.delia@premierplanninginc.com
Download Brochure
Premier Planning Partners Home
Premier Planning Partners Home
  • Home
  • About Us 
    • Meet Our Team
    • Financial Planning Philosophy
    • Business Philosophy
    • Investment Philosophy
  • Services 
    • A Blueprint for Business Succession Planning
    • Comprehensive Financial Planning
    • Levels of Partnership
  • Our News 
    • Premier Insights
  • Resources 
    • Retirement
    • Estate
    • Investment
    • Insurance
    • Tax
    • Money
    • Lifestyle
    • Glossary
    • Tax Resources
  • Contact
  • Account Access 
    • Client Login
    • Wealth Management Platform
    • American Funds
    • Lincoln Financial Group
    • Midland National
    • Nationwide
    • Ohio National
    • Symmetry Partners
Download Brochure
Tax Read Time: 3 min

What If You Get Audited?

“Audit” is a word that can strike fear into the hearts of taxpayers.

However, the chances of an Internal Revenue Service audit aren’t that high. Between 2010 and 2018, the IRS only audited 0.6% of all individual tax returns.1

And being audited does not necessarily imply that the IRS suspects wrongdoing. The IRS says an audit is just a formal review of a tax return to ensure information is being reported according to current tax law and to verify that the information itself is accurate.

The IRS selects returns for audit using three main methods.2

  • Random Selection. Some returns are chosen at random based on the results of a statistical formula.
  • Information Matching. The IRS compares reports from payers — W2 forms from employers, 1099 forms from banks and brokerages, and others — to the returns filed by taxpayers. Those that don’t match may be examined further.
  • Related Examinations. Some returns are selected for an audit because they involve issues or transactions with other taxpayers whose returns have been selected for examination.

There are a number of sound tax practices that may reduce the chances of an audit.

  • Provide Complete Information. Among the most commonly overlooked information is missing Social Security numbers — including those for any dependent children and ex-spouses.
  • Avoid Math Errors. When the IRS receives a return that contains math errors, it assesses the error and sends a notice without following its normal deficiency procedures.
  • Match Your Statements. The numbers on any W-2 and 1099 forms must match the returns to which they are tied. Those that don’t match may be flagged for an audit.
  • Don’t Repeat Mistakes. The IRS remembers those returns it has audited. It may check to make sure past errors aren’t repeated.
  • Keep Complete Records. This won’t reduce the chance of an audit, but it potentially may make it much easier to comply with IRS requests for documentation.

Remember, the information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation.

Audits Have Changed

Most audits don’t involve face-to-face meetings with IRS agents or representatives. In 2019, the latest year for which data is available, 73.8% were actually conducted through the mail; only 26.2% involved face-to-face meetings.

Source: IRS.gov, 2022

1. IRS.gov, 2022
2. IRS.gov, 2022

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Share |

Have A Question About This Topic?

Thank you! Oops!

Related Content

Spotting Credit Trouble

Spotting Credit Trouble

The wise use of credit is a critical skill. These 10 questions will help you assess your skill level.

Insuring Your Business With a Buy/Sell Agreement

Insuring Your Business With a Buy/Sell Agreement

It may help your business be better prepared in the event of the death of a principal or key employee.

Types of Stock Market Analysis

Types of Stock Market Analysis

Most stock market analysis falls into three broad groups: Fundamental, technical, and sentimental. Here’s a look at each.

Contact

Office: (727) 210-7795

Fax: (727) 245-6900

801 West Bay Drive

Suite 707

Largo, FL 33770

Send an Email

Quick Links

  • Retirement
  • Investment
  • Estate
  • Insurance
  • Tax
  • Money
  • Lifestyle
  • All Articles
  • All Videos
  • All Calculators
  • All Presentations

Check the background of your financial professional on FINRA's BrokerCheck.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. Some of this material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named representative, broker - dealer, state - or SEC - registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.

We take protecting your data and privacy very seriously. As of January 1, 2020 the California Consumer Privacy Act (CCPA) suggests the following link as an extra measure to safeguard your data: Do not sell my personal information.

Copyright 2023 FMG Suite.

Terms of Service | Privacy Policy

This website is for educational or informational purposes. It is not intended as investment, legal, retirement or tax advice.

Securities and advisory services offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC.

The LPL Financial registered representative(s) associated with this website may discuss and/or transact business only with residents of the states in which they are properly registered or licensed. No offers may be made or accepted from any resident of any other state.