Tax Audit Reviews: What Is a Random Tax Audit?
A tax audit reviews one’s income tax returns to ensure that all entries in them are accurate and true. This is why most people assume that a tax audit happens only when there’s a violation that merits a penalty of sorts. It’s no wonder, then, that many people dislike the idea of going through such an audit. But the Internal Revenue Service (IRS) may put you through an audit even when they have not detected any issue in your tax returns. A random audit is one such example. What is a random audit and why is it done? A random audit is exactly as its name implies. It can happen out of the blue to any taxpayer. Quite literally, the IRS randomly selects a taxpayer from their database and conducts an audit on the person. The IRS, however, has a good reason for doing this. Random audits are performed for statistical purposes, helping ensure that the IRS’ records and established data norms are as close to reality as possible. In a way, random audits help the IRS detect discrepancies if t...