The chance of you having to undergo a tax audit after filing your taxes each year is rare, but there are certain elements of a tax return that may pique the IRS’ attention and cause them to take a second look at your filing. If you do find yourself the subject of a Florida tax audit, it may help calm your nerves if you understand what lies ahead.
Per U.S. News and World Report, only about 0.4% of Americans wind up being the subject of audits. However, your chances of having your tax return audited might increase if you fail to disclose some of your income, make administrative errors or fail to include the cryptocurrency you hold. The IRS may also decide to audit you at random, although this is even less common. IRS audits fall into three distinct categories.
Correspondence audits often take place by mail. If the IRS audits you in this manner, plan on having to send additional documentation via mail to show why you filed your taxes the way you did.
Office audits may become necessary if the IRS needs more documentation than you might realistically provide through the mail. You typically must meet with an IRS agent at a location within a reasonable distance from your home and show that person more about your finances and income.
Field audits are the ones most taxpayers fear because they often involve IRS agents combing through your financial affairs and reviewing everything closely. Field audits often involve IRS agents coming to your home or place of employment.
While your chance of having the IRS audit you is low, if you do become the subject of an audit, the odds of you having to make changes to your tax return is high.