Budget cuts and new responsibilities are limiting the Internal Revenue Service's (IRS's) resources and ability to police tax returns, so this year, the agency is only going after the "worst of the bad guys," according to the Associated Press.
Although the audit risks are lower this year, it doesn't mean all taxpayers are off the hook. Here's how to prepare for an IRS audit.
Determine which tax year is being audited. For the most part, the IRS has three years after you file your return to audit. However, depending on the circumstances of your filing, the time could be doubled. For example, taxpayers who've omitted more than 25 percent of their income will be susceptible for IRS audits for six years, according to Forbes. So make sure you know which tax year the IRS is auditing.
Know your rights. The Taxpayer's Bill of Rights was enacted to prevent abuse by the IRS during audits. Some of the rights taxpayers have are the right to know why the IRS is asking for information, how it will be used, and the right to appeal disagreements.