- The Tax Genie
You Likely to be Audited by the IRS?
What triggers a tax audit? Several factors
can come into play. For one, an audit is more likely if
your tax return stands out from the crowd.
- Large deductions
attract attention, but the IRS is especially interested
in write-offs that seem out of line with the rest of your
return. For example, if you claim $30,000 of mortgage
interest and report only $40,000 of income, you'll
probably raise some eyebrows at the IRS. But don't let
the possibility of an audit keep you from taking every
- A red flag may go up if you claim
a relatively large casualty loss, or if you make a large
non-cash charitable contribution. To support these
deductions, keep good records. In the appropriate case ,
consider documenting your deduction with a photograph, or
obtain a written report from an expert appraiser and
attach it to your income tax return.
- Being in business
can trigger an audit, especially if you're a sole
proprietor who files IRS "Schedule C." Your
return is more likely to stand out if you can claim large
write-offs for business travel and entertainment, take a
home office deduction, or show a large, overall loss.
- You'll almost
certainly receive an IRS "matching" notice if
you don't properly report the income from your W-2 and
1099 forms. Be sure to include all such income, no matter
how small, and make the description on your tax return as
clear and accurate as possible.
- One of the better
defenses against audits is to have your tax return
prepared by a well-qualified accountant, tax attorney, or
taxpreparer. The headache you save may be your own.