Whether you own a large or small business or are an individual taxpayer, no one is immune from receiving an audit notice from the IRS. In fiscal year 2019, the IRS audited 771,095 tax returns, which resulted in almost $17.3 billion dollars in additional taxes.
Although many people believe that affluent individuals are more likely to be audited, that is not always true. In fact, 256,708 audits in 2019 were conducted on individual tax returns where the Earned Income Tax Credit – a benefit for lower-income individuals – was claimed.
If your tax return is being audited by the IRS, there is a greater likelihood that the IRS will find errors in your return, which can result in hefty IRS audit penalties and interest. In more extreme cases, the penalties can cost you tens of thousands of dollars – or even result in jail time.