The idea of a tax audit is nerve-wracking for most people. However, the Internal Revenue Service usually does not perform an inspection at random. There are several reasons that people might receive an audit notice.
The IRS is more likely to audit someone if the numbers on a tax return do not add up. Nerd Wallet says that some people may accidentally put numbers in the wrong box on their tax returns. A small math mistake early on could cause people to report less income than they earned. Additionally, people may face an audit if they round up their numbers. It may be easier for people to work with whole numbers. However, the IRS needs to see the exact amounts.
Errors with charitable donations
Charitable deductions can also trigger an audit. CNET notes that many people itemize their deductions when they file their taxes. The total amount of charitable deductions can cause IRS representatives to examine their situation. Someone may, for example, earn $60,000 and report $20,000 worth of donations. This number might seem exaggerated to IRS officials, and they could decide that an audit is necessary. Taxpayers should make sure that they have the paperwork to verify their donations. Additionally, they may want to keep the donations statements they receive from charities.
Errors with paperwork
People usually need to fill out several different forms as they complete their tax returns. If people forget to include a form when they submit their taxes, the IRS may begin the audit process. An audit could also be necessary if people submit paperwork for deductions that they have never received before.
If people receive notice of an audit, they should take action immediately. Many people may need assistance resolving the problem.