Common tax audit myths

Many Texans have misconceptions about tax audits from the Internal Revenue Service. Understanding these myths might help people to feel a little better if they have received notices of audits. Knowing the myths surrounding audits might also help business owners and individual taxpayers to reduce their anxiety when it is time to file taxes. Here are some of the most common tax audit myths that you should know.

Myths about things that increase audit chances

Taxpayers have a large number of misconceptions about things that could increase their chances of being audited, including the following:

  • E-filing income tax returns
  • Claiming a home office deduction
  • Filing a late return
  • Amending a return
  • Claiming a large number of deductions
  • Using an accountant or tax preparer

These things do not increase your chances of being selected for an audit. Instead, the IRS uses a computer algorithm for this purpose.

Other myths about audits

There are a number of other common myths about audits that you should know. Some of them include the following:

  • Small businesses are not audited
  • If you owe the IRS, you will be jailed
  • Being audited always means that you will have to pay more money
  • You will not be audited if you have received your refund check
  • An audit will be filed within one year of a return
  • Filing an extension gives you more time to pay your taxes
  • You won’t be audited if you use a professional to file your return

Small businesses can also be audited even though large corporations are audited more frequently. As long as you have not committed fraud, you will not be thrown in jail if you owe the IRS money and cannot afford to pay.

People who have received notices that they have been selected for tax audits may want to talk to experienced tax attorneys for advice on what to do. An attorney might help to defend against an audit or appeal the IRS’s findings.