Data Speaks to IRS Audit Activities

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On behalf of Silver Tax Group posted in IRS Tax Audits on Wednesday, April 4, 2018.

While the IRS conducted fewer audits in 2017 than in the prior year, this does not mean that the numbers of audits are insignificant. During the year, there were 934,000 audits throughout the United States.

The IRS continually conducts its business. During 2017, the IRS collected revenues of $3.4 trillion concerning 245 million returns. The agency refunded approximately $437 billion. The IRS also keeps itself busy in fighting tax-related identity theft.

Though the IRS filed less levies and liens in 2017 than in 2016, a significant amount of such actions still occurred. This is in part due to changes in the way the agency enforces past tax payments. The agency’s online format makes enforcement easier concerning tax collection actions.

Why audits happen

An audit does not mean there is any wrongdoing on a taxpayer’s part. But audits usually are the result of suspicion on the part of IRS agents. The IRS may feel there were irregularities in reporting. A possible trigger for an audit could be the amount of deductions a taxpayer takes. As we’ve stated in the past, the IRS may even be curious about certain tax transactions conducted during the period in question.

Michigan taxpayers might be understandably nervous regarding potential tax audits. Even if an audit results in no showing of wrongdoing, the process can be time consuming. And taxpayers going through the audit process can face fines, penalties and possibly criminal charges.

How to face a tax audit

With the possibility of facing such consequences, an audit requires an immediate response. Questions regarding audits are usually best for qualified tax attorneys to answer. While other tax preparers can claim that they can help, without a law license they cannot provide legal advice. Attorneys can advise individuals on what steps to take in preparing for an audit, and can provide representation while an audit takes place.

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