Just some info for this thread...
The IRS loves to audit the upper middle class. These people earn often enough to want to evade taxes, but don't make enough to afford a ton of lawyers and a-hole accountants.
Anyways, the audit penalties for understating taxes are usually these categories:
1) paying back the amount the audit finds you understated
2) interest on the late payment
3) 20% "accuracy-related" penalty
While H&R Block may help you with the administrative element to comply with an audit if you paid for "audit defense", they aren't going to pay the costs for #1. Even if they made a mistake in your filing; these are simply taxes you should have paid anyway.
#2 is kind of iffy, my understanding is that if H&R block was the reason for the mistake, they will pay this. You may have an easier chance getting a Tesla service rep on the phone than getting H&R Block to send the interest over to the IRS.
My understanding about #3 is that the IRS naturally assumes a "filing for themselves" person was trying to mislead the IRS to cause a significant error (over $5k) in the filer's favor. The term "too good to be true" often gets used... where the self-filer does things and tries to claim a windfall by making a "mistake."
This penalty can seem highly discretionary to the person getting audited. But usually the taxpayer who files their own taxes needs some really good data to convince the IRS the error was truly a mistake. I guess this is one of the good reasons to use an H&R Block or CPA to do the taxes. The IRS would more easily believe it was really a mistake if a tax professional made the error. If H&R block is willing to deduct the whole solar roof, this is a good way to defend the premise where the "mistake" was not intentional.
If it makes you feel better, the audit could actually find in your favor and result in a refund. The IRS will pay you interest if that's the case.
