Your tax return could be flagged by the IRS. Here’s when it may happen


Olde Hornet

Well-Known Member

“You have things you wouldn’t ordinarily have like stimulus payments, or who should have gotten them but didn’t, or think they should,” Grzes said. “It’s clearly going to be a challenging year for taxpayers, no doubt about it.”

While most people will never face an audit — just 0.15% were audited in fiscal year 2019 — there are other types of IRS inquiries, such as a notice of income-reporting discrepancy and proposed additional tax due. Those things fall short of an official audit, which the IRS generally gets three years to initiate after the challenged return is filed.

Unreported income​

One sure-fire way for your tax return to grab IRS attention is a discrepancy between the income you report and the information that the agency has.
All those forms you receive showing income also go to the IRS. That could include a W-2 from work, a 1099-NEC or similar form showing income earned as an independent contractor, a 1099-INT showing taxable interest of $10 or more on a bank account or a 1099-G showing unemployment income (yes, it is taxable and you must report it).
And if you fail to report any of those earnings, you’ll hear from the agency — the discrepancy will generate an automatic letter.
 
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