What Is a Tax Return Audit—and Why Is It Happening to You?
You just got a notice from the IRS, or maybe an agent from the Massachusetts Department of Revenue is knocking at your door. Suddenly, you’re in the middle of a tax return audit—and it’s no joke. Audits can drag on for months and feel like a second job you never asked for. So why is this happening, and what can you do about it?
What Exactly Is a Tax Return Audit?
A tax return audit is when the IRS or state tax authorities decide to take a closer look at your finances. They want to confirm that the income and expenses on your tax return match what shows up in your bank accounts, invoices, and receipts. Audits usually fall into one of three categories:
- Correspondence Audit: Handled through letters and mailed documents.
- Office Audit: Requires you (or your representative) to bring records to an IRS office.
- Field Audit: An agent visits your home, business, or accountant’s office for a detailed examination.
Why Are You Being Audited?
There are several reasons you might be flagged for a closer look by the tax authorities. Some common triggers include:
- Discrepancies: For example, your W-2s or 1099s don’t line up with what you reported.
- High Deductions or Credits: Large or unusual claims compared to your income can raise suspicions.
- Random Selection: Sometimes, the IRS picks returns randomly to keep taxpayers honest.
- Repeated Issues: Frequent errors, late filings, or other patterns can also draw extra scrutiny.
How to Prepare (Without Losing Your Mind)
An audit can feel like a full-time job. The first and most important step is to gather all relevant documents—bank statements, receipts, invoices, and previous returns. Keeping them organized will help you respond quickly if the auditor comes back with more requests. Also, consider getting professional help from a tax attorney or CPA. They know the process inside and out, and they can handle the back-and-forth communication so you don’t have to juggle it on top of running your business or managing daily life.
Your Rights During an Audit
Although the IRS wields a lot of power, you do have rights. One is the right to professional representation, which means you can have a tax attorney or CPA speak for you during meetings or correspondence. Another is the right to appeal any decisions you believe are incorrect, as long as you do so before the deadline. And remember, there are limits on what auditors can demand. If anything feels out of line, you’re not powerless—you have protections under the law.
What Happens After the Audit?
Once the audit is over, you’ll learn whether you owe more taxes or if your original return stands. Generally, there are three possible outcomes:
- No Changes: Your return is accepted, and you can breathe a sigh of relief.
- Additional Taxes, Penalties, or Interest: If the auditor finds inaccuracies, you could end up paying more.
- Potential Refund: In rare cases, the audit may reveal that you overpaid, leading to a refund.
How Laura Brown Can Help
Being audited can feel overwhelming—and it’s natural to worry about your finances, your reputation, or even the stability of your business. At Laura Brown Law Office, we leverage decades of experience dealing with both federal and state tax authorities. We gather your documents, handle the conversations with auditors, and fight for the best possible outcome if there’s a dispute about your tax liability. Our goal is to protect your rights and help you focus on your daily life without the constant stress of an audit hanging over your head.
Tips to Lower Your Audit Risk
There’s no foolproof way to avoid an audit, but there are steps you can take to make it less likely:
- File on Time and Accurately: Simple mistakes and overdue returns can draw attention.
- Double-Check Your Deductions: Overstating or misclassifying deductions is a common red flag.
- Keep Detailed Records: Organized paperwork can back up your claims if the IRS ever comes calling.
Don’t Let an Audit Take Over Your Life
Tax audits are stressful, but you don’t have to face them alone. Laura Brown Law Office is here to guide you through the process, from prepping documents to appealing decisions you don’t agree with. Contact us today to schedule a consultation, and let us help you stay in control—no matter what questions the IRS throws your way.