Will The IRS Tighten Individual Tax Review Standards?

The IRS has recently started to add more IRS individual tax reviews. This means more people are being subjected to the dreaded audit. The reality is though very few people are audited even with tighter scrutiny. In 1997 less than 2% of all taxpayers were subjected to this. Here’s what you should know about IRS individual tax reviews.

Raising the Scrutiny

While the most recent numbers on tax audits are up from 1997, the IRS has talked about increasing the amount of full reviews on individual filers. While it doesn’t appear that more people get audited now, they have started to review more things such as deductions, charitable contributions, and medical expenses. Chances are if you have filed any of these, your return may be flagged for further review.

How to Avoid the Trouble

If you keep proper records you should be ok, even in the event of a review. Hang on to W-2’s, bank statements, bill receipts, and any other records that may be pertinent to your return. It’s suggested that you retain your records for six years. If the IRS requests more information from you, it may not mean that you are facing an audit. But be sure to respond! Failure to respond to a request for more information will almost certainly result in further investigation and the audit may not be far off!

While there has been no official word on raising the number of reviews as of yet, the IRS changes the rules almost every year. Be prepared and file accurate returns to avoid any hassle.

 
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