IRS audits may be increasing, so be prepared
The IRS just released audit statistics for the 2020 fiscal year and fewer taxpayers had their returns examined compared with prior years. Overall, just 0.5% of individual returns were audited. Historically, this is very low. However, even though a small percentage of returns are being audited these days, that will be little consolation if yours is one of them. Plus, the Biden administration has announced it would like to increase tax compliance. The easiest way to survive an IRS audit is to prepare. On an ongoing basis, maintain documentation (invoices, bills, canceled checks, receipts, or other proof) for items reported on your returns. Contact us if you receive an IRS audit letter.