Tax Preparation

MYTHS

My Tax Preparer is Outstanding because I have never been Audited

There are two basic forms of Tax Related Issues. Those the IRS catches and those they miss. A lack of an audit doesn’t qualify your Tax Preparer any more than a series of audits disqualifies a Tax Preparer. Audits are routine activities of the IRS and most of modern day audits are conducted semi automatically through a series of letters.

The IRS is very limited these days in respect to their resources to conduct audits thus huge numbers of omissions, errors, and fraud are overlooked or limited to largely automatic systems. Although the IRS doesn’t advertise exactly how it determines when and who to audit, there’s a tremendous amount of demand to collect unpaid taxes and prosecute criminals and fraudsters.

The IRS Computer System is designed to filter Tax Information looking for errors and inconsistency’s. These filters are also not advertised, but they exist and if anything, you report raises a flag, at the very least, you’re going to get an Audit Letter which you are required to respond too.

THE AMOUNTS AND YOUR FILING HISTORY COUNT

The same is true for Fraud and Willful Tax Avoidance. If you have a clean filing history, you have less of a chance of being audited than someone who has a history of problems with the IRS.

TAX PREPARERS CANNOT PREVENT AUDITS

A Tax Preparer who is good at their job and works hard to stay above board can help you avoid costly mistakes. Additionally, a Tax Preparer with a good history with the IRS will help you as well.

NEVERTHELESS

All Tax Preparers have audited returns on a regular basis, it’s just part of Tax Preparation.

IRS AUDITS ARE NOT AUTOMATICALLY BAD

Most IRS Audits I experience are easily solved. Sometimes they are wrong and just need to be corrected, sometimes they are right and added money must be paid. As long as you play the game according to the rules, most IRS Audit situations can be resolved and they do not involve any criminal prosecution.

Every single person whom I have experienced issues with the IRS that could not be easily resolved did something beyond just a simple mistake or omission.