Tax audit triggers you should not ignore

BUT WORRY LESS ABOUT ... GETTING AUDITED Although the IRS is stepping up its audit rate, those exams are mainly aimed at taxpayers making $400,000 or more and business partnerships. “The

average taxpayer is not a focus of the audits,” says David Kass, executive director of Americans for Tax Fairness, a nonprofit advocacy group. As IRS data shows, for taxpayers earning

between $50,000 and $200,000, audit rates in 2022 were just 0.2 percent, or 2 people out of 1,000. By contrast, the rate climbed to 1.3 percent for those earning $1 million to $5 million and

8.7 percent for people with incomes higher than $10 million. If you should happen to get an audit letter or a notice of a discrepancy regarding your return, it may just be that you’ve

forgotten to enter a form in your return — say, a stray 1099. Don’t panic. But don’t ignore the correspondence either, Nassau says. If you fail to respond by the deadline given, the IRS will

automatically assume that its numbers, not yours, are the correct ones, or disallow the entries on your return that it has questions about. Simply send answers to any questions you’re asked

— audits are usually done by mail — and include copies of relevant documentation (not original documents). PAYING A LOT TO FILE The good news is that for low- and middle-income taxpayers,

there are many free and low-cost tax-filing resources available, starting with the AARP Foundation Tax-Aide program. Find a Tax-Aide location near you and see a full list of the documents

you’ll need to get your return prepared. If your adjusted gross income is $79,000 or less, you can file your federal taxes for free. Several tax prep companies also provide free filing if

you have a simple return, including TurboTax Free Edition and H&R Block Free Online Tax Filing.  People with moderate incomes, disabilities or limited English can get free tax prep via

IRS-certified volunteers through the Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs.