Tips To Avoid A Tax Audit

Less than 1% of Americans will be audited by the Internal Revenue Service in the forthcoming year. While some of these audits are totally accidental, many audits are in fact instigated by the taxpayers themselves.

Below is a list of red flags that can cause your return to be chosen by the IRS for examination. Knowing what some of the flags are can keep you out of danger.

1. Mathematical Errors – Many returns are chosen to be audited simply due to basic math errors. So when filling out your tax return make sure that everything adds up. Even the smallest of errors can raise an eyebrow.

2. Failure to Sign Your Return - A big percentage of individuals simply forget to sign their tax returns. Failure to sign the return will almost assure that it will get further inspection. The IRS may wonder what else you may have forgotten to include.

3. Under Stating Your Income – Make sure you report all of your income. If you fail to report wages, you will be forced to pay back-taxes in addition to penalties and interest.

If you find yourself being audited by the IRS, be straightforward with the examiner and reply to all inquiries as promptly as possible. It’s usually a good idea to have an tax attorney there with you too.