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Will e-filing your return increase your chances of an audit?

On Behalf of | Mar 31, 2022 | Tax Audits

Even though the IRS has accepted electronically filed returns for decades, only recently has this method reached immense popularity. Due to the iterative improvements in tax filing programs and the ease with which people now navigate their computers, even the IRS admits an overwhelming majority of individuals elect to e-file their taxes each year.

While the figures change year over year, the IRS estimates that around 90% of the tax returns they receive will be electronically transmitted. This might come as a shock to those who eschewed e-filing for fear that it could potentially trigger an audit. Since this method of filing has become overwhelmingly popular in recent years, it is unlikely that returns made over the computer represent any sort of red flag. In fact, the IRS notes several reasons why it might be more beneficial to file electronically, including:

  • Improved encryption technology: As cybercriminals get smarter, the protections in place get more sophisticated. Any of the e-filing software the IRS accepts must meet strict security guidelines. Not only are the returns themselves protected, but the encryption safeguards your personal information against identity theft and return fraud.
  • Improved convenience: Tax software has improved to the point where it often asks simple questions to guide you to the correct section. Gone are the days of searching for the right schedules and collecting them from the local government building to fill out and mail. The app contains everything, and it is literally one click away.
  • Improved communication: E-filing opens an easy door of communication between the taxpayer and the IRS. From the ease of submitting the forms to the quick acknowledgment of acceptance, it is often an immediate exchange of information.

Many people choose to prepare a return and have their chosen tax or legal professional review the data prior to sending it electronically. With any questions or reservations about e-filing, it is wise to ask up front rather than waiting for a problem to arise.