Number of Correspondence Audits Increases | Tax Tip of the Week | No. 185

Expect to See More of These

In a recent report, the IRS says that in 2001 they closed 538,000 mail audits of individual tax returns and assessed about $1.4 billion in additional taxes. Ten years later, the IRS more than doubled the number of mail audits.  In 2011, they issued 1.2 million correspondence audits and assessed $8.7 billion in additional taxes. With such a high rate of return on the investment, the IRS will likely continue to use mail audits to close the tax gap. What is troubling, however, is over 50% of these audits are issued in error.  In the majority of times that clients bring these audits to us, we are able to eliminate the additional tax assessed or at least reduce the amount of additional taxes owed.  We suspect that too many taxpayers simply pay the additional tax on the audit notice without challenging the IRS. If you ever receive a notice from the IRS, Ohio, or any city, the first thing to do is relax.  There is a good chance the notice was issued in error.  The second thing to do is to bring us a copy of the notice right away! 

As always, give us a call with any questions or concerns you may have. 

You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.

Rick Prewitt - the guy behind TTW...until next week.