An IRS audit surge refers to an increased effort by the IRS to scrutinize tax returns more closely. It typically involves a rise in the number of audits conducted to identify discrepancies, underreporting, or fraud in tax filings. These surges often focus on high-income individuals, large corporations, and areas such as cryptocurrency transactions.
Steps to Prepare for an IRS Audit
If you believe you may be affected by the IRS audit surge, here are the steps to prepare:
- Review Previous Returns: Double-check your recent tax returns for any discrepancies.
- Maintain Proper Documentation: Gather all necessary financial records, including receipts, invoices, and bank statements.
- Seek Professional Representation: Contact Dimov Tax to represent you in dealings with the IRS.
- Stay Proactive: Regularly review your financials and correct any mistakes before the IRS flags them.
IRS Audit Types
- Correspondence Audit: Conducted via mail to verify specific items on your tax return.
- Office Audit: The taxpayer is requested to bring documentation to an IRS office.
- Field Audit: IRS agents visit your home or business to conduct the audit in person.
Common IRS Audit Triggers During an Audit Surge
| Trigger | Explanation |
| High Deductions | Excessive deductions or credits claimed on a return, especially for businesses. |
| Unreported Income | Income not reported on W-2s, 1099s, or other tax documents. |
| Cryptocurrency Transactions | Failure to report crypto gains or losses accurately. |
| Home Office Deduction | Incorrect claims for home office expenses. |
IRS Audit Surge FAQs
1. Why is the IRS conducting an audit surge?
The IRS conducts audit surges to close the tax gap, recover unpaid taxes, and detect potential fraud, particularly in areas like cryptocurrency and high-income individuals.
2. How can I avoid being audited during an IRS audit surge?
Ensure you accurately report all income, claim appropriate deductions, and file your returns on time. Working with a tax professional like Dimov Tax can also reduce the likelihood of errors.
3. What should I do if I receive an IRS audit notice?
Contact a tax expert immediately. Dimov Tax offers comprehensive IRS audit representation and pre-audit reviews to help you through the process.
