H&R Block is stepping up its tax audit support services as the tax prep chain sees the IRS audit rate doubling.
Last year, the tax prep giant pointed out, one in 99 individual tax returns were audited by the IRS, up from one in every 202 in 2000. Block warned that more taxpayers should also expect to receive the IRSs new soft notice warning letters as the service works on closing the estimated $345 billion tax gap.
The soft notice asks taxpayers to review their tax returns and file amended returns if their original returns were in error. It also advises taxpayers that the IRS will carefully review future returns. The IRS has been sending the soft notices when it has received documentation, such as 1099 forms, showing income that appears to be underreported on the tax return, but does not choose to institute a formal audit.
Block advises that when taxpayers receive a soft notice or audit notice from the IRS, they should tell a tax professional right away and arrange to meet to discuss their tax situation.
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