Question: I found an expense related to my sole-proprietory business. I want to file a tax amendment to reflect the business expense. Before I do that, I want to make sure of something. Will filing a tax amendment result in a higher IRS Audit risk?
Answer: Most IRS audits and notices are generated electronically, which means IRS has its own system to flag potential issues in a tax return. Therefore, the IRS audit process remains the same. If you need to file an amendment to correct an error, it may prevent your tax return from being flagged and help you avoid an audit.
Since your question is related to adding a business expense, it’s unlikely that the IRS will audit you (request you to add more expenses). Business expenses are reported by taxpayers, not by a third party. Would they know that you incur a computer monitor expense? Best Buy won’t report it on your behalf – it’s your responsibility to keep track of your business expenses.
If you need to report a previously unreported business expense, it’s highly likely that the IRS will send you a letter to correct the income discrepancy, aka, asking you to cough up tax money.
Keep in mind that whether your tax return was filed correctly since the beginning or if you need to file an amendment, it’s not a guarantee that you won’t receive a letter from the IRS or your state revenue agency. We are here to help with your personal income tax issues.
- Home Office Deduction: Who Really Qualifies? (Simple, Friendly Guide)
- Losing Your Tax Refund: How It Happens (and How to Make Sure It Doesn’t Happen to You)
- The Tax Deadline Is Looming—but I’m Not Ready. What Are My Options?
- Moving from California to Texas? How the Move Affects Your Taxes (Plain-English Guide)
- Moving States? How That Affects Your Taxes (A Simple, Real-Life Guide)
Have more questions? Contact us to get help.
