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You receive an audit notice: what could be the reason?

Getting an audit notice can be extremely stressful, especially if that audit could potentially result in some sort of liability. To the best of your knowledge, you and your accountant did everything accurately so you worry about why the IRS has asked for an audit.

While sometimes an audit can be randomly triggered, in other cases an audit notice is sent when the IRS notices a discrepancy. You may be wondering: what kind of discrepancies could trigger an audit?

One of the most glaring issues that the IRS may notice is when you fail to report income. Whether this was on purpose or accidental, it may lead to some serious fines. You may have forgotten about the small freelance job that you did at the beginning of the year, but the IRS knows about it because it is listed on your 1099. Make sure you do your best to recall any additional income that should be reported.

The next issue that comes up often is a discrepancy in numbers. If you accidentally leave off a zero somewhere or type in a 9 instead of a 3, you may run into some major number issues. Even if these were innocent errors, the IRS may take them very seriously. Make sure to work with an accountant so that your numbers are accurate.

Finally, if you are claiming business expenses, make sure that you have proof of those expenses and that those expenses are ordinary for your type of business and that they are actually necessary. There are a lot of things to take into consideration when filing your taxes. If you end up being audited, you may want to reach out to an attorney for support.

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Pridgeon & Zoss, PLLC
7301 Ohms Lane, Suite 420
Edina, MN 55439

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St. Anthony, Minnesota 55418

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