The government’s recent stimulus package was distributed to millions of Americans. The stimulus money is not considered income by the IRS and will not be taxed. While the money itself is not taxed, this will count toward your household’s adjusted gross income for 2020. For some, this additional income may be enough to put you into a higher tax bracket.
While the number of individuals audited is small in comparison to returns, it does not necessarily imply a suspicion of criminal activity. Tax returns that have any unusual deduction, conflicting calculations or are missing paperwork may be flagged for an audit. After you receive a letter from the IRS indicating that you are being audited you will have thirty days to respond. In the letter, the IRS will indicate the paperwork that is needed and these 30 days should be used gathering this information and supplying it to the IRS.