Tom: Are we more likely to get audited if we file close to the deadline or file for an extension?
Mellody: This is a great question. Many people have it in their head that if you file late or if you file for an extension, your likelihood of getting audited goes up. From what most experts can tell, it’s an old wives tale. No one knows how the IRS selects its audits, but we do know that certain things can flag your return for further investigation. From what we know, an extension might actually decrease your chances of getting audited, as it demonstrates you’re are taking the time to ensure that things are done correctly.
On the other hand, what will get you audited is not filing your tax returns, not paying what you owe, and not asking for an extension.
Tom: Are there any scams out there that are targeting late filers?
Mellody: The two most common scams that impact late filers are phone scams and phishing scams, as they prey on people’s anxieties about taxes and filing late. Phone scams tend to be calls from individuals who impersonate IRS or other government bureau staff. Phishing scams also play on anxieties. Both of these types of scams are primarily targeting your personal information, but can also seek financial transactions. The scam artists threaten taxpayers with police arrest, license revocation, and other things if you do not pay them or turn over information. Just remember, the IRS will never call or send taxpayers an email. Most primary information from the IRS comes in the form of snail mail, so don’t click on the links or provide your information over the phone to anyone claiming to be from the IRS.
Tom: thanks for joining us, Mellody.
Mellody: You are welcome, Tom!