IRS Tax ProblemsIRS News

Another blog post I have told you that the IRS Audit’s about 1% of returns. It varies by years and it is often influenced by the IRS resources and other demands upon their time. This percentage also varies based upon your income. On the average, only 6 tenths of a percent of Taxpayers with adjusted gross incomes between $25,000.00 and $75,000.00 were audited. Higher income earners are audited much more often than just 1%. This brings us to what IRS Taxpayer Advocate Nina Olson calls “unreal” audits. These are typically form letters alerting you to errors or omissions in your returns. Obviously, these are not full scale audits and not nearly as intrinsic, but they can still cost you money.


In 2010, more than 9 million individual taxpayers received these letters, or so-called “unreal” audits they would run and do an analysis by the Taxpayer Advocate Service. When you combine that, with full scale audits, this boost the percentage of individual taxpayers audited to 4.4%. Additionally, while the real audits tend to target wealthy people, the majority of individuals receiving these so-called unreal audits are low or middle income taxpayers.


Unreal audits generally fall into three categories:


1).        Zero Reported Income-this is when the IRS computers match up the income on your return, but it does not match the income reported to the IRS by third parties. For example: the W-2 sent by your employer to the IRS, shows an income amount different than what you reported on your income tax returns.


2).        Mathematical Errors– This is self explanatory. IRS has detected your math was incorrect and they have fixed it for you, usually to increase the tax you owe.


3).        Automated Substitute For Returns– If you do not file a tax return, the IRS generally files one for you and it is called a Substitute for Return. In my experience, it is always going to hit you with a greater tax bill than what you would actually have if you did file a return.




  Follow these notices and include a bill for the amount of unpaid tax which you owe. Do not ignore it. This does not mean you should assume the IRS is right.


If you have not filed a return, you should definitely file your own return to correct what the IRS filed. However, if they are indicating that you made a mathematical error or under reported your income, you should verify who is in fact correct. It is possible, that your bank or some other financial institution provided incorrect information to the IRS.




1).       Be sure to provide correct social security numbers for you and your dependents. Provide an incorrect number or fail to provide one the IRS will disallow the exemption. In a typical year, nearly 300,000.00 tax returns contain incorrect identification numbers.


2).        If you received a tax form with incorrect information from a financial institution, or another third party, try to get it fixed before you file your tax return.


Len Stauffenger, devotes his practice to helping people who owe the IRS money. His practice is nationwide. He has been recognized by the Publishers of the Columbus Dispatch as being among the top 5% of Attorneys in the State of Ohio. He has been representing taxpayers across the country for years in resolving their IRS problems.


            For a free consultation call 1-877-349-8297.