What triggers an IRS audit?

In Dallas, as in other parts of Texas, the Texas Comptroller of Public Accounts conducts tax audits. Although the state does not generally require these audits, they ensure compliance with state laws, deter tax evasion, educate taxpayers and promote voluntary compliance with the community.

Why am I scheduled for an audit if my taxes are updated?

Tax audits are done randomly to check compliance. If you are an individual, the IRS handles federal tax audits, which happen when there are discrepancies or red flags on your federal tax return.

Due to the more complex system, businesses have more things to consider. The IRS may select your business for an audit based on these criteria.

• Size of the business
• Previous audit results
• Random selection
• Other information from other state agencies

You should not worry if you are updated on your tax payments or have a business and you are compliant, even with a scheduled audit.

How can I prepare for an audit?

Preparing for an audit involves several steps. You must ensure that everything you need is available. Here are some tips to get you started.

• Collect and organize your tax returns, receipts, invoices, bank statements and other records that support the information on your tax return by year and category.
• Review your past tax returns to ensure there are no discrepancies or unusual details.
• Respond to the tax audit schedule and provide the information they ask from you.
• Whether it is a correspondence or field audit, you must prepare for the meeting to avoid wasting the agent’s time.
• Know your rights as a taxpayer.

The most important part of preparing for an audit is ensuring you have legal representation to help you through the process. Audits are complicated, but having an experienced and supportive tax lawyer will help you avoid delays.