What are ‘automated under-reporter audits’ and how do they impact taxpayers?

An Automated Under-Reporter (AUR) audit happens when the IRS’s computer systems find differences between a filed tax return and data from third parties (e.g., W-2s, 1099s). These arenít traditional in-person audits. Instead, the IRS sends a notice proposing changes sometimes triggered by simple mismatches or missing forms.
Impact:
 – Limited appeal rights if deadlines are missed.
 – Adjustments are often made without considering the taxpayerís explanation unless they respond promptly.