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When the IRS decides to review your tax returns in Texas

On Behalf of | Jun 2, 2023 | Tax |

Filing taxes in Texas is stressful. There are multiple forms to fill out, deadlines to meet and the right amount to pay. If the IRS flags your return for review, don’t panic. It doesn’t necessarily mean you did something wrong.

A review is not the same as an audit

A tax review is generally a routine check of your returns to ensure the information you provide is accurate. The IRS can do it randomly, maybe to check if you received all the credits and deductions you’re entitled to, if something in your return looks out of line, or if you’ve had any large changes from the previous year.

This is different from a tax audit that involves an extensive examination of your books, receipts and records. The IRS can choose to do an audit if they find something that raises a red flag, like a large discrepancy in income or expenses.

If they request documentation, you’ll need to provide it

The IRS may ask for more paperwork or clarification on something in your return. They might even want you to come in for an interview. You have a legal obligation to provide whatever information the IRS requests, and it’s best to submit everything they need to avoid time-consuming reassessments.

The IRS may ask you to pay back taxes and interest

Sometimes, the review may result in a bill or a refund. If the IRS finds that you owe additional taxes, they will send a bill with instructions on how to pay. The amount includes the taxes due, plus interest and any applicable penalties.

Appealing your assessment outcome

If you are not happy with the outcome of your review, you may be able to appeal it within 60 days of receiving your assessment. You can do so by contacting the IRS office that sent you the tax review letter and filing a request for an appeals conference.

Tax reviews are not uncommon. You can resolve them quickly and efficiently when you follow the instructions and submit any requested documents. If you disagree with the outcome, an appeals process is available to challenge it. Knowing it’s normal to face scrutiny occasionally can help reduce your worry and stress when filing taxes in Texas.