Thursday, October 4, 2007

"Totoo ba na may random IRS audit this year?"

Yup, this is true, so make sure that your tax documents are organized.

Why are they doing this? To close the $290 billion tax gap, which is the difference between what is collected and what should be collected. To do this, the IRS needs “fresh” data to update their computer program that statistically determines which tax returns to audit in the future to get the most money, according to a report.

In some cases, taxpayers selected for special audit won't know about them because their income and deductions can be verified through W-2 wage statements. But they may be asked by the IRS to submit documents supporting their income and deduction claims.

If you have a complicated tax return and a sit-down with IRS examiners is necessary, you might want to get in touch with a tax professional who has experience in dealing with the IRS.

Should taxpayers be worried? "In most cases, no," an IRS official said to "But, let's face it. The IRS doesn't mind if people are a little nervous."

If you purchased a tax preparation software, you might have a built-in support from a tax professional so dig that information out.

To put it in perspective, here's what Turbo Tax says:

"The chance of receiving random audit notice is slim but if you do get picked, don’t panic. Remember your chance of receiving that random audit notice is .0096%. You might have a better chance of winning the lottery!"

Here's a link to tips on avoiding an audit that you can use when you prepare your next tax return.

Lastly, when you hire a tax professional to assist you should you need it, make sure that they come highly recommended. There are lots of unsavory types who prey on people's fears so be careful.


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