When do audits occur

It takes a while for all of these filings to get done and the computer to get through this process. Although these are some of the most popular myths, experts say plenty of other misguided beliefs about audits run rampant, some even with their own regional flavor.

The bottom line is to understand what the process is all about. They have a long process to go through before that. You have a lot of rights. So many of the myths about auditing are quite narrowly focused on the Internal Revenue Service, suggesting that the IRS is the only entity that matters. That's a big-time mistake says Tim Clegg, a budget software developer and retired financial coach.

No one out there is hungrier for revenue than the states. And they will not be as friendly, by and large. He recommends tax filers be at least as diligent and careful when filing their state returns as they are with their federal tax returns.

When you file your taxes with TurboTax, you automatically receive access to our Audit Support Center for help understanding your IRS notice, what to expect and how to prepare for an audit, and finding year-round answers to your audit questions. The TurboTax Audit Support Guarantee also includes the option to connect with an experienced tax professional for free one-on-one audit guidance. For those who want even more protection, TurboTax offers Audit Defense, which provides full representation in the event of an audit, for an additional fee.

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Know what tax documents you'll need upfront Get started. An IRS audit is an examination or review of your information and accounts to ensure you're reporting things correctly and following the tax laws. Sometimes state tax authorities do audits, too. Nothing is inherently sinister about an IRS audit or state audit. However, people who are consciously cheating the system do have reason to be concerned. As you walk the line this tax season, here are seven of the biggest red flags likely to land you in the IRS audit hot seat.

This applies to everyone who must file taxes. If your math is a little shaky, using good tax preparation software or a tax preparer near you can help you avoid unfortunate errors that can lead to an IRS audit.

Easy way to score an IRS audit? You may be tempted to submit only the W-2 form from your herding job and keep the freelance writing income on your Form under wraps. A reports nonwage income from things like freelancing, stock dividends and interest.

One type of , the MISC , typically reports amounts paid to independent contractors. Well, guess what? Pretty simple. This one is for the self-employed. If you are your own boss, you might be tempted to hide income by filing personal expenses as business expenses. But before you write off your new ski boots, consider the suspicion that too many reported losses can arouse. The IRS may begin to wonder how your business is staying afloat.

IRS Publication has details. Along the same lines as reporting too many losses is reporting too many expenses. To be eligible for a deduction, purchases must be 1 ordinary and 2 necessary to your business.

A professional artist could probably claim paint and paintbrushes because such items meet both requirements. The questions to ask are: Was the purchase common and accepted in the trade or business? They may accept it; or if the auditor notes something questionable, they will identify the items noted and forward the return for assignment to an examining group. Note: filing an amended return does not affect the selection process of the original return. However, amended returns also go through a screening process and the amended return may be selected for audit.

Additionally, a refund is not necessarily a trigger for an audit. Should your account be selected for audit, we will notify you by mail. The IRS manages audits either by mail or through an in-person interview to review your records. The interview may be at an IRS office office audit or at the taxpayer's home, place of business, or accountant's office field audit. Remember, you will be contacted initially by mail. The IRS will provide all contact information and instructions in the letter you will receive.

If we conduct your audit by mail, our letter will request additional information about certain items shown on the tax return such as income, expenses, and itemized deductions. If you have too many books or records to mail, you can request a face-to-face audit. The IRS will provide contact information and instructions in the letter you receive. These guides will give you an idea of what to expect. The IRS will provide you with a written request for the specific documents we want to see.

The IRS accepts some electronic records that are produced by tax software. The IRS may request those in lieu of or in addition to other types of records. Contact your auditor to determine what we can accept.