Is there a fee charged for needing to have an audit done? Or, would I just have to adjust the tax amount I owe (after going through said process)?
If the IRS proposes additional tax they would send you a bill for it.
(Quit worrying about any "risk" meter. It's only an uneducated guess, as the IRS doesn't release their audit criteria. I look of it as more of a marketing tool than a useful guide to audit potential.)
The original post date for these entries is 2019, and I was hoping for some current info pertaining to tax year 2020. As many business owners did not generate ANY business income, or if they did it was drastically reduced from previous years, due to COVID, is the general opinion here that a return showing a "High" Audit Risk due to Schedule C Business Loss will not be considered unusual by the IRS this year, and therefore won't actually be at a "High" audit risk?
Thanks in advance for your opinions.
It will be interesting to see what the IRS Audit activity is in 2021.
Schedule C reporting and High Risk predictors in TurboTax remain valid as these are based on IRS historical patterns observed.
These are often behavioral and percentage based indicators that likely are still valid in a COVID environment.
For example: a business that typically has gross income of $100K and $15K in supplies wouldn't have gross income of $20K and $10K in supplies in a COVID environment.