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Audits 
Avoiding an Audit
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Don't be late with your filing |
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Steer clear of conflicts | |||||||||||||||||||||
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Be reasonable with revenues and costs | |||||||||||||||||||||
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The first rule of audit avoidance is to avoid special scrutiny. Obviously, filing and paying your taxes late could call attention to your return. (Filing an extension on April 15th does not constitute late filing provided that with the extension you have properly estimated the tax due and paid that amount in with the extension.) One would especially want to avoid situations where the Internal Revenue Service would have to contact them pertaining to a missing return. In all cases, when returns or payments are late, it is always advisable to keep the IRS informed. Absence isn't likely to make their hearts grow fonder. |
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An especially significant cause of audits is a complaint to the IRS by one party against another. Most often the complainant is a spouse (or ex-spouse), an employee, even a tenant. It is best to watch out for these types of conflicts, especially with unreasonable parties. Even if you have done nothing wrong, a conflict can end up costing you the extra expense and burden of going through an audit. |
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3. Naturally the filing of a return that appears "unreasonable" can raise the attention of the IRS. An unreasonable return is one in which expenses are too high a percentage of gross income or income is too low in relation to one's fixed living expenses. In a similar vein, it is your responsibility to choose a competent and legitimate tax preparer. The IRS will sometimes audit most or all of a preparer's returns if they feel there is a pattern of overstating deductions. And even if a preparer has added deductions to your return which you have not authorized, don't assume that this is not your responsibility. By signing your return, you are stating that you have looked at the return and are satisfied as to the correctness of the income and deductions included therein |
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 Return to Taxes |
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