As a taxpayer, there are few things less desirable than receiving the news that your tax returns have been selected for an audit by the IRS.

Just the thought of an audit is enough to make you break out in a nervous sweat—especially as a business owner. However, in many cases, these fears are unfounded. Most taxpayers know very little about the audit process (the complex US tax code is not exactly recreational reading for most people), and as a result, worry more than they should. Today, we are going to share some basic information on the topic of IRS audits. Feel free to contact us to learn more!

The odds of your return being audited are slim. According to a recent Washington Post article (http://www.washingtonpost.com/lifestyle/a-taxpayers-worst-nightmare-the-letter-from-the-irs-saying-youve-been-selected-for-an-audit/2012/01/17/gIQA5G5o5P_story.html), only one percent of taxpayers were audited in 2011. If you earn over one million per year, however, the chances of being audited rise to 12.5 percent.

If your tax return raises “red flags”, you are much more likely to be audited. While a very small number of audits are truly random, in most instances an audit is performed because something on the tax return stands out to the IRS. For instance, if your tax liability is much, much lower than others in a similar financial situation, you may well be audited. This is why having an expert prepare your taxes is exceptionally valuable—because we know how to spot red flags and correct any potential problems.

The best defense against an audit is accuracy and thorough records. If your tax return was accurately calculated and you have the records to back it up, you don’t have anything to worry about. It is important to maintain these records – as in some circumstances, you can be audited for tax returns filed years in the past.

Contrary to popular belief, you aren’t going to be screamed at by an angry IRS auditor. As a taxpayer, you are entitled to privacy, confidentiality, and professional service. While an audit is never going to be pleasant, the idea that you will be harassed by an auditor is fictional. Of course, if you’d rather avoid the process altogether, you have the right to be represented by an expert throughout the process.

An audit doesn’t always result in you owing more money to the IRS. In fact, many audits end with the determination that the taxpayer filed properly—or even that the taxpayer overpaid and is entitled to a refund. So don’t despair if you receive a notice that you’ll be audited. As long as you have accurately prepared your returns, you have nothing to worry about!

The notion of your returns being audited is terrifying to most taxpayers, but it doesn’t have to be. The most important thing you can do is to ensure that your tax returns are properly prepared. Contact us today if you would like to learn more!