Some things that could trigger an IRS audit?
IRS do not usually scrutinize every tax returns. In fact, it was reported that IRS audit about only 1% of all taxpayer in the United States. There are certain things that could trigger IRS tax audit, you may want to learn them to stay off the radar of this tax-monitoring body.
Red flags that trigger IRS audit
* High earner:
Top earners are more likely to be audited than low earners. The more people make, the more chances of them hiding some of it from IRS. Of course, IRS know this and target top earners.
When you work for a large company, your employer usually keeps your taxes throughout the year, and report your income to the IRS, it is much harder to find space to maneuver your taxes intentionally or not. But when you work for yourself the case is different so the IRS may have more interest in your tax returns.
* You have a shady tax preparer.
Once the IRS identifies a tax preparer who cut corners, the Agency may consider some or all previous tax returns the tax preparer have submitted to check for other possible anomalies. In this article some things that could trigger an IRS audit? This is the worst, unluckiest situation you can get into
* Filed by hand.
Four out of five people now e-file their returns, but there are still a lot of people who favors the old method of pen and paper. By using the online software to complete your tax returns limits the potential for many errors such as miscalculations, transposed digits, leaving required fields blank. But those who file by hand often make mistakes, which can make the IRS take notice.
* Someone tipped the IRS.
IRS rewards whistleblowers with cash for information leading to a successful audit. In 2014, the services paid over $52 million total to whistleblowers. In addition, the IRS has in the past launched investigations on the basis of newspaper reports and even social media messages.
* claim large deductions are a major in Some things that could trigger an IRS audit
Large tax write-offs especially in relation to your income – can attract IRS scrutiny. Charitable donations, particularly non-cash, are among the most common to maintain the difference between the value of assets and the actual write-off. The differences in humanitarian write-offs usually carry a letter from the IRS asking for additional documents. If you can provide them, you can put the matter to rest. Otherwise, you may have to write a check to Uncle Sam.
* Unreported income.
Always report your income and file your taxes whether is necessary or not. There is an old saying it goes like this “It’s better to be safe than sorry”
* Breaking the rules on foreign accounts.