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Actions that may lead to an audit

It is unlikely that an individual in Georgia or anywhere else will have his or her tax return selected for audit. Overall, just 0.6% of returns will face further scrutiny after they are sent to the IRS. The odds of an audit are influenced by how much money a person makes. Those who make $10 million or more have an audit rate of 14.4%, but money is not the only factor in determining whether a return will be reviewed.

Wealthier taxpayers may face more frequent audits

Taxpayers in Georgia may fear an IRS audit as one of their worst nightmares. These detailed overviews of tax filings may leave even honest taxpayers worried. That's why filers should be aware that the agency announced that it may be changing its methods to determine which returns to audit. In testimony before Congress, the IRS Commissioner said that the agency would work to increase its focus on wealthier taxpayers. This came in response to questions from members of Congress about why people with low incomes were disproportionately targeted for audits, particularly applicants for the Earned Income Tax Credit.

Fewer audits, best practices mean less tax hassle

Georgia residents might be happy to know that their chances of being audited are fairly low. While it is still important to turn one's taxes in on time, an individual has a 1 in 160 chance of being audited. In 2010, about 1 in 90 people were audited. A tighter budget led to a smaller IRS, which means fewer audits.

Dealing with tax audits

Some Georgia taxpayers may be concerned about getting audited by the Internal Revenue Service. Much of the concern could be due to the significant amount of misinformation that circulates about tax audits.

Behavior during audit could lead to criminal tax case

Criminal tax cases are relatively rare in Georgia. Tax professionals and attorneys will say that one common way to bring on a criminal case related to taxes is to be evasive or obstructive during dealings with the Internal Revenue Service. It's something to keep in mind during an audit, the behavior of the person being audited could turn the case into a criminal one. When an auditor comes across suspicious behavior during an audit, he or she can alert the Criminal Investigation Division of the IRS.

Keeping tax records forever isn't a bad idea

Georgia residents and others are advised to keep a physical and digital copy of a tax return for as long as they live. This can be helpful in the event that the IRS claims a person hasn't filed a return in a given year or filed a fraudulent return. Furthermore, the government generally has no deadline to come after a taxpayer who understates his or her income on a tax return.

Facing an IRS audit

Most people living in Georgia take care to submit accurate tax returns. However, some tax documents end up being flagged by the IRS's algorithms, subjecting filers to an audit. Interestingly, there is some evidence that it is not the wealthy who are the most likely to be audited, but those who claim lower incomes and might be eligible for the earned income tax credit.

Audits continue to decline at IRS

When Georgia residents file their taxes, they may be concerned about the threat of an audit by the Internal Revenue Service. The thought of an auditor going through receipts, paperwork and pay stubs can be enough to make any taxpayer nervous. However, statistics show that tax audits are less likely than they have been in years. The budget of the IRS has been cut repeatedly since 2011; at that time, it had a budget of $12.1 billion annually. In 2017, that figure was down to $11.2 billion. During the intervening years, the agency lost one-third of its personnel dedicated to enforcement.

An overview of a taxpayer's rights

If a person is audited by the IRS, he or she has rights that the agency must respect. For instance, Georgia residents have the right to have questions answered promptly and to expect employees to act professionally at all times. If a taxpayer does not receive good service, he or she may ask to speak with a supervisor about his or her experience.

Potential benefits of legal representation during a tax audit

When Georgia residents or businesses receive a notice from the Internal Revenue Service or other tax agency, they likely reach out to their accountants for advice and help. Representation from an attorney could also be beneficial, especially in situations that involve tax disputes or an audit. In some ways, the legal profession is better suited to adversarial encounters.

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