How to Handle a Tax Audit

This is always a good thing to know. The fact that it’s a small chance that you’ll get audited is not the same as no chance you’ll be audited.

There’s nothing that strikes fear into the heart of a small business owner like getting an audit notice. The chance of being audited in any given year is small: About 1 percent of 2008 taxable returns were audited, according to the latest available IRS statistics. But self-employed individuals and small business owners are more likely to be audited than employed persons, particularly if they report adjusted gross income of more than $100,000.Scott Berger, a CPA and tax principal with Kaufman Rossin in Boca Raton, Fla., spoke recently to Smart Answers columnist Karen E. Klein about “hot spots” for IRS audits, what to do during an audit, and how to avoid audits in the first place. Edited excerpts of their conversation follow. Read more…

So, about 1 percent. So if there were 300 million people who filed taxes,  about 3 million would get audited. That’s not really such a small number. 3 million bucks would be a great thing to have…but then you would most likely be audited.