What to Know About Audit Defense
An IRS tax audit is among the most grueling, emotionally draining financial experiences a person can go through. That said, if the IRS selects your tax return for an audit, don’t panic. Take a deep breath, and stay calm. Although an audit can seem intimidating, you have resources at your disposal to make the process less stressful.
Most importantly, taxpayers have the right to hire representation to assist them during the tax audit investigation process. Only certain professionals can represent you during a tax audit, such as attorneys, CPAs, and enrolled agents. These audit defense representatives provide an array of services during an audit, including document preparation and strategic counseling.
The team at Boxelder Consulting has an established track record representing taxpayers during audits. Whether you’re an individual or small business taxpayer, Boxelder can help you implement strategies in order to deal with the IRS and successfully complete the audit with as few scars as possible. Our audit defense team can help you prepare necessary documents, comply with deadlines, draft correspondence, and negotiate with auditors and other tax authorities.
- A tax audit is a formal investigation of your records in order to verify a tax return.
- You have the right to hire representation to assist you during an audit.
- Representatives can assist with a wide range of tasks during an audit.
How Common Are Tax Audits?
Taxpayers will be glad to hear that tax audits are relatively rare. The vast majority of taxpayers will never be audited. Let’s look at the statistics.
In 2017, a total of 149,919,416 tax returns were submitted to the IRS. Out of nearly 150 million returns, less than one million – 933,785 returns – were selected for an audit. This is just 0.6 percent – the IRS audited less than one percent of all returns!
If you break down the statistics by income, things get a bit more nuanced. Generally speaking, however, individuals in higher income brackets have a greater chance of getting audited.
Here’s a breakdown by income of the percentage of individual returns audited by the IRS during fiscal year 2017:
|Adjusted Gross Income||2018 Audit Rate|
For most taxpayers, the chance of being audited is even less than 0.6 percent. For taxpayers who earn $25,000 to $200,000 the audit rate is less than 0.5 percent. Those who make less than $25,000 actually have a higher audit rate, but this is because many of these taxpayers claim the earned income tax credit, and the IRS conducts many audits to ensure that the credit is not being claimed fraudulently.
The bottom line: tax audits may be daunting, but the probability of being selected for an audit is actually quite low.
Don’t Join The Statistics: Reach Out to Boxelder Today
At Boxelder Consulting, we understand that each and every case we handle is unique — every person has their own story. This is why we handle each project on a case-by-case approach. Our experienced team of licensed tax professionals will develop a tailored defense strategy aimed at guaranteeing you the best possible outcome.
If you have been selected for an audit, get in touch with the Boxelder team today. The audit procedure is complex and can cause a great deal of stress. Having an experienced representative on your side will make a world of difference.