Filing a tax return: in which cases an audit may be required

18 April expired filing tax returns in the United States. Over the past year, the IRS received additionally $25 billion through audits after filing declarations. Half of this amount was collected from individuals.

Reasons for conducting an audit may be different. The first is errors made when filling out the return (for example, if the 1099 or W-2 form does not correspond to the information specified in the return). The second is issues or transactions of other taxpayers, such as business partners or investors whose tax returns were selected for audit (more applicable to organizations). Finally, the third reason is random selection or computer screening, since sometimes tax returns are selected solely based on a statistical formula.

Following 2015, the IRS reportedly collected a total of about 2,6 billion documents from US citizens, including the 1099 and W-2 forms. The tax administration's computers compare the obtained information with the completed tax reports. In that case, if you, for example, forgot to specify the income from freelance work (freelance) or made a typo in the column on payments for educational loans, the system will automatically recalculate the amount of tax revenues and send you the bill.

Last year, the authorities seized $ 6,3 billion in declarations in which their reported figures were underestimated. In 614 thousands of cases, taxpayers did not provide documents at all, and the total debt in this category amounted to $ 2,7 billion.

What can I do? The easiest option is to pay the bill you receive from the IRS. In this case, there will be no need to communicate with a tax agent or, as in most cases, seek the services of qualified accountants.

If your tax invoice is selected for an audit, you will be notified by mail or by phone. The audit can be carried out both by mail, and during a personal interview and verification of the taxpayer's documentation. Interviews are held at the US Tax Administration (office audit), at the taxpayer's home or at his place of work (field audit).

The audit may leave the declaration unchanged if you have substantiated all the issues under consideration, result in changes to the declaration if agreed with the taxpayer, and also, in the third case, if there is a disagreement between the Tax Administration and the individual or organization, the taxpayer files an appeal.

Statistics show that the absolute leaders among those audited are people who earn $ 10 million or more (almost a third of the total in the 2015 year). By category, these are mainly owners of companies, rental properties, or farms.

At the same time, fewer audits were carried out in 2015 than throughout the last decade. However, there are cases that result in serious penalties - from large monetary fines to prison terms. Last year, the IRS initiated a total of nearly 4 cases.

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