Common IRS Audit Flags

Two things in life are meant to make everybody cringe: root canals and IRS audit. If you look after your teeth and avoid particular factors, you will be able to avoid a root canal.  Similarly, you’ll be able to avoid an IRS audit by steering clear of certain practices and take care of your financial health. The IRS may have to audit you if many red flags come up.

An IRS audit is a fair review of your tax returns to decide their accuracy. The burden of proving particular deductions falls on you.

Take note of these IRS audit flags:

* Earning over $100,000.
* Your income drastically changes. You should be able to prove the reasons why.
* Charitable donations are too much. You should keep receipts and prove your donations.
* Inconsistencies in present and past returns. Changes in name, address, etc. have to be proven.
* If self-employed, too many deductions.
* Inconsistent state and federal returns.
* Tax returns are illegible or incomplete.

You can avoid an IRS audit by filing your tax returns truthfully. Documentation must be kept for at least 3 years. Follow the following tips to avoid further problems:

* Be aware of your rights such as you can conduct the audit by mail and you don’t have to meet with the IRS, pay in installments, and refute the audit’s accuracy.
* Be ready to present receipts by saving documentation.
* Consult a professional if you think the issue too complicated.
* You have nothing to fear if it’s an honest error.
* Do not disclose more information than necessary.
* Do not panic because accuracy is merely reviewed and you’re not being accused of anything.

Your IRS problem shouldn’t be a nightmare. Avoid audits, and if you happen to be selected for one, keep calm. You can always consult an attorney for assistance.

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