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Article: Are You at Risk for an Irs Audit?

esavvymom

Legend Member
Staff member
Sep 8, 2008
7,895
146
I saw this today.....good tips for tax time.
http://www.wral.com/5onyourside/story/10844858/

Some taxpayers are more at risk of being audited by the Internal Revenue Service, but you can take action to not draw too much attention to your tax return.

Accountant Alan Rosen has had clients get letters from the IRS announcing that they are being audited.

"The first thing that goes through their mind is absolute panic that they're being audited," he said. "What did they do wrong? They can't believe it. There goes everything they've worked for, saved for all these years."

For people who earn less than $200,000 a year, the likelihood of being audited by the IRS is about one in 100. The odds, though, go up significantly for certain types of taxpayers.

"Taxpayers who have their own business and itemize deductions for home office, telephone, business meals*– they need to be extra careful," Tobie Stanger, with Consumer Reports, said.

Business expenses such as meals or travel are one of the first things the IRS goes after. They could be considered personal expenses.

Consumer Reports advises keeping a detailed calendar of your business meetings and hanging onto the actual receipts, not just credit-card bills.



If you claim a deduction for a home office, make sure it looks like an office. It can't double as a laundry or playroom.

"Another red flag that can attract the attention of the IRS is excessive charitable donations. If you're donating 50 percent of your income, that can seem out of place," Stanger said.

With donations, make sure you have dated receipts. They are required for cash donations of $250 or more and for gifts of clothing and furniture.

"You should keep your tax records for as long as the IRS can audit you, which is three years. But just to play it safe, we recommend holding them for seven," Stanger said.

Check and re-check the math on your tax return. Simple errors trigger the most notices from the IRS.

If you do your taxes yourself, two of the leading software programs, H&R Block At Home and Turbo Tax, offer some level of additional help in the event of an audit. You might need to buy the audit protection in advance.
 

Admin Greg

Veteran Member
Staff member
Apr 13, 2004
1,644
174
Thanks! Just sent in my taxes today! Fingers crossed!
 

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