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Does Filing an Extension Increase Your Audit Risk?!

Written by Jerry W. Slade

Monday, 23 April 2012 21:26

Does Filing an Extension Increase Your Audit Risk?!

Historically, there is no correlation between filing an extension and getting audited. In my personal conversations with audit managers at the IRS, I am told over and over that the answer is no, except for....

Waiting for the last minute when an Extension is filed????

I have been told, on more than one occasion, that if you wait until October 14th or 15th to file your tax return, you stand a better chance of being audited. The IRS thinks that many taxpayers believe that filing at the very last minute actually lessens their chances of being audited due to the mountain of returns received by the IRS. Do I think that? Sort of, yes, maybe. The IRS will never tell us officially and our clients are rarely audited. Those that are audited are usually asking for it because of heavy deductions related to travel, entertainment and automobile expenses that are disproportionate to their related income. But then again, the returns filed during the rest of the year are subject to the same scrutiny.

What To Do???

If you're a little guy or gal, don't go sauntering onto the schoolyard wearing colors from other neighborhoods. In other words, don't challenge them. File your tax returns no later than September 15th. Of course, that won't eliminate your odds of getting audited completely, but they might not single you out as someone who likes to poke a stick in their eye.

Have you received an Audit Notice or do you want to know more about the different types of IRS Audits? Click Here to learn more by reading our FAQ section.

Call us 408-236-2444 or Contact Us.

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