Thursday, March 10, 2016

Common Myths About Tax Audits

By Eva Rosenberg, EA

Audits are pretty terrifying experiences – even when you know you did nothing wrong. But what if you did? Uh oh! The experience is even worse when you know that you fudged on your tax return. What will they do when they catch you? Or, if you did more than just fudge, what if you actually lied – and reduced your income a lot? Will you go to jail?

Well, nothing is ever as bad as you expect. First, let’s dispel one big myth. The average taxpayers, even those with large omissions on their tax returns, will not be seeing jail time. The worst that you will face are additional taxes and penalties. The bad news is if you really did leave out a lot of income, or made up a large portion of your expenses, your penalties could be crippling. That means you’re a crook.

Good news – and bad news

The good news is IRS staffing is down. They were only able to audit about .7% (7/10th of 1 percent) of all taxpayers (or 1.2 million audits). The bad news is the audits are more targeted, designed to catch taxpayers who will owe more money. In fact, the IRS assessed nearly $27 billion in additional taxes. The good news is, over 38,000 examinations resulted in additional refunds to the taxpayer of $829.5 million. Sometimes audits are a good thing.

Just in time for tax season comes a tax book like no other. Packed with money-saving strategies every taxpayer can use, Deduct Everything! - #1 in Hot New Releases and Small Business Taxes on Amazon - is the definitive guide to help you keep more of your hard-earned money at tax time. You will learn all the latest tips from national tax expert and best-selling author Eva Rosenberg - the award-winning TaxMama© - a seasoned tax professional - including how to save money with hundreds of write-offs, legal tax breaks, credits and loopholes.

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