A previous post on this blog talked about how likely it is for a resident of the greater Chicago area to face an IRS tax audit. The likelihood of an IRS audit depends heavily on how much money a person makes, and it can also depend on a number of other factors that the IRS generally keeps tight-lipped about.
The comforting thing, though, is that according to recent statistics, only a very small number of tax returns filed in a given year, about one half of one percent, actually receive any kind of audit at all. In other words, of the 196 million returns filed with the IRS, around 1.1 million received an audit.
Moreover, of these audits, the vast majority of them, over 70 percent were what are called desk audits. These less than intimidating audits, as the name implies, involve a person's simply turning over records and responding to questions via mail or email.
The IRS agent in charge of the audit then, at least metaphorically, reviews the information at his or her desk and determines if any changes in one's tax obligation are warranted. The remaining audits are conducted in the field, meaning that an agent will actually meet face-to-face with a taxpayer.
One should also not think that an audit is necessarily going to mean additional taxes as well as penalties and interest. Although relatively rare, the IRS reports that of the returns it examined, it wound up giving additional refunds in 34,000 cases.
Still, if a Frankfort, Illinois, resident gets notice that he or she is the target of an audit, it is a serious affair. A resident may want to consider securing legal representation if he or she is given notice of an audit.