The possibility of getting audited by the IRS strikes fear into the hearts of most people. Often, we hear the horror stories about those unfortunate enough to get audited and the terrible results that come along with it. Well, it’s true that people do get audited, but some of the stories you may have heard aren’t really what they seem. Here are some myths about tax audits.
Audits don’t always mean the sky is falling. Many people think that just because they get a letter from the IRS there will be a hearing of some kind. The truth answering a few questions is usually all it takes to settle the whole thing. Even if you end up having to pay, its usually a matter of just sending in a check and that’s it.
Some people think that those with low to moderate income never get audited. Recently because of the countries economic problems and because of increased tax fraud, the IRS has ramped up the number of audits it does. People of low income are not immune to an audit; the IRS is doing audits across the board for all incomes.
Do audits happen immediately? The IRS abides by a statute of limitations of three years after the due date of the return. There are cases however in which the IRS maintains it can go back six years and they recommend you keep most records at least that long. Generally, however, it is accepted that audits generally always happen two years after you file.
Realistically you shouldn’t worry that much about getting audited. The fact is not that many people get audited, about one percent and for the IRS, doing audits is not the preferred thing to do because they require a lot of resources and gives them a negative image. A lot of the time the government would rather not do these audits at all.