Whether an Austin resident can pay his or her tax bill in full or not, tax returns are due in a timely manner. Unfortunately, if someone is unable to meet their tax liability, they might neglect to file a return and end up facing a number of consequences instituted by the Internal Revenue Service (IRS).
While many Internal Revenue Service tax audits are conducted randomly, there are certain factors that might trigger audits. When the information on one document does not match the information on the other, such as the income reported does not correspond with the income on a W-2, the chances of getting audited are high. Similarly, if someone's automatic deductions are more than for others in that profession, they are assigned a high Discriminant Inventory Function System Score, and the higher the score, the more likely the audit. Lastly, the more someone earns, the more likely they are to get audited.
An Internal Revenue Service audit is something most, if not all, Texas residents dread, which is why worrying about it is only natural. People hold on to receipts and other paperwork for ages in fear of one, but how long should a person worry about an audit and hold on to documentation?
Texas residents may be concerned about getting selected for an audit by the Internal Revenue Service. However, having knowledge about what the process can entail and what a person's rights are in the process can go a long way toward addressing many concerns. First of all, its important to know that an audit does not always mean that there is a problem. It is possible someone is selected for an audit based on a statistical formula. Tax returns are compared against similar tax returns with the help of a computer program. Tax returns can also be selected for an audit if they involve issues with other taxpayers whose audits were selected for audit.