Reasons For Audits

If you are among the thousands of Americans audited every year by the IRS, you might wonder what the specific reasons are for the audit and what alerted the IRS to audit you.

The IRS computer system determines most of the audits. It compares the details on the tax return that you file with the details it already has from the W-2 and 1099 form. These numbers need to match. If not, you will probably receive an IRS notice for audit. This commences the correspondence audit.

Factors including low or no business profit, low gross profit margin, high travel and entertainment deductions, high use of cars in the business, and high car expenses are also looked into by the computer system. The elements might mark you for an audit.

You might be subject to additional investigation based on: ...........

IRS Problem Solver