The deadline to get those taxes in is quickly approaching, and H&R Block is offering a number of tax tips for those concerned about extensions, audits, deductions, and penalties. This year, the federal government is anticipating a $450 billion tax gap – that is, the amount the IRS estimates is missed in tax collections – and in an effort to close that gap, the government will conduct a number of IRS audits of those suspected of having underpaid. In 2011, 7.4 percent of taxpayers were contacted concerning their returns, and the IRS collected $15 billion through audits. H&R Block advises that even with the anticipation of more audits this year, taxpayers shouldn’t be afraid to claim all the tax breaks to which they are entitled.
While tax season is January through mid-April, audits are conducted year-round. The IRS may contact a taxpayer as late as three years from the filing date. However, contact may be very soon after the return is filed if an item is flagged for some reason. Anyone who receives an audit notice should contact their tax professional immediately to prevent any additional penalties and fees.
Most audits are conducted via mail, but some resolutions to audits are as simple as sending supporting documentation to the IRS. Either way, it is important to respond to the notice promptly. If a face-to-face meeting is required, some taxpayers may elect to have their representative attend without them. In the end, if the taxpayer disagrees with the auditor’s findings, the results of the audit may be appealed.
Regardless of who prepares tax returns, taxpayers are legally responsible for the contents. To find the nearest H&R Block office, visit www.hrblock.com or call 800-HRBLOCK.