Automated Underreporter (AUR) audits are the most common IRS examinations. Understanding how they work can help you handle them effectively and avoid penalties.
What is the AUR Program?
The AUR program flags mismatches between your tax return and third-party data. If discrepancies are found, you may receive a CP2000 notice or a more formal audit notice.
Steps of an AUR Audit
Flagging Discrepancies: The IRS compares your return to W-2s, 1099s, and other forms.
Sending a Notice: If a mismatch is found, the IRS issues a CP2501 (soft notice) or CP2000 (hard notice).
Taxpayer Response: You can agree, partially agree, or disagree with the proposed changes.
Resolution: Depending on your response, the IRS may assess additional taxes or close the case.
How to Prepare for an AUR Audit
Review your Wage & Income Transcripts.
Gather all relevant documents.
Consult a tax professional to ensure your response is accurate.
How Arc&Ledger Can Help We provide expert guidance for AUR audits, from reviewing transcripts to drafting responses. Contact us to protect your tax compliance.
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