{"id":28852,"date":"2013-04-04T15:07:41","date_gmt":"2013-04-04T15:07:41","guid":{"rendered":"https:\/\/www.hrblock.com\/tax-center\/?post_type=newsroom&p=28852"},"modified":"2023-06-01T13:15:53","modified_gmt":"2023-06-01T18:15:53","slug":"audit-worries-shouldnt-keep-taxpayers-taking-valid-tax-breaks","status":"publish","type":"newsroom","link":"https:\/\/www.hrblock.com\/tax-center\/newsroom\/irs\/audits-and-tax-notices\/audit-worries-shouldnt-keep-taxpayers-taking-valid-tax-breaks\/","title":{"rendered":"Audit worries shouldn\u2019t keep taxpayers from taking valid tax breaks"},"content":{"rendered":"
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H&R Block advises taxpayers timely response to IRS notices could mean tax savings<\/h2>\n<\/div>\n
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The federal government estimates it has a $450 billion tax gap (the amount the IRS estimates is missed in tax collections). One way the government tries to close that gap is through IRS audits of those suspected of having underpaid. In 2011, 7.4 percent of taxpayers were contacted by the IRS about their returns, and the IRS collected $15 billion from audits.\u00a0H&R Block<\/a>\u00a0(NYSE:\u00a0HRB<\/a>) advises that even with an atmosphere that includes more people being audited, taxpayers shouldn\u2019t be afraid to claim all the tax breaks to which they are entitled.<\/p>\n

\u201cThe best defense against an audit is to report all income and claim only the tax deductions and credits you are due,\u201d said Kathy Pickering, executive director of The Tax Institute at H&R Block. \u201cOften, the IRS may request additional information or paperwork. A timely response by the taxpayer could mean the difference between owing extra tax or being able to justify claiming the valuable tax break. That is why being able to substantiate what is on the tax return is very important, so be sure to keep organized\u00a0financial records<\/a>\u00a0supporting those tax breaks.\u201d<\/p>\n

Who is being audited and why?<\/strong><\/h2>\n

The profile of a potential audit candidate has shifted from the rich to include people who make far more modest incomes. Of the more than 1.5 million audits conducted in 2011, 2 in 3 were of people who made $50,000 or less. Following are some common reasons the IRS contacts taxpayers:<\/p>\n