|
  |
|
|
Some Common IRS Flags for Audits
By Darrin Mish of Law Offices of Darrin Mish
Every person would want to know what items in the tax return will be regarded as red flags by the IRS. The IRS utilizes computer programs that will process almost all tax returns and check them for some suspicious entries when compared to the statistical average. Anything beyond this average will register as a red flag. Depending on the severity of the situation, that particular tax return may be manually rechecked by an IRS employee or the computer will just automatically print a notification that will be sent to the concerned taxpayer. Audit flags do not imply that you'll definitely get audited, but your chances will substantially increase. Because of this, it is imperative that you know what are the audit flags that the IRS will least likely to disregard. A sloppily accomplished and an incomplete tax return is among the most common audit flags. Thus, you should ascertain that your returns are completely filled out with both the information needed and the correct mathematical calculations. If there are erroneous computations found in your tax return, it will then be sent to an actual IRS agent who would have to manually recheck it. Electronically filed returns are less likely to have this kind of error as the system has an inherent math checker. Another scenario that will put up red flags is not declaring all of your earnings. Basically, anyone who gives you a W-2 or 1099 also sends a copy to the IRS. This explains why the IRS has a reliable record of everything you earn and if you try to outsmart them by not giving them complete reports, you are certainly up for an IRS audit. Miscellaneous income, dividends, and interests must always be declared as part of your earnings so you will not have problems with the IRS. The IRS also audits taxpayers who declare that they are either making a great deal less or a great deal more than the minimum wage. Statistically, this reason alone subjects almost 5% of all taxpayers to an audit. In addition, those who are earning more than $100,000 annually have 5 times more chances of getting an audit. If your tax record shows extreme fluctuations in your income level, that will again raise an audit flag. The IRS understands that most people don't have such big differences in their earnings and when it is reported in a fashion like this, the IRS takes notice. The IRS considers extreme fluctuations as your means of underreporting your earnings. Believe it or not, having too many zeros in your tax return will cause an audit flag to be raised. For instance, most transactions are not exactly $1,000 or $500. If you start rounding off too many investment earnings figures, the IRS will feel that something is going on and too many of the amounts are highly unlikely. This will, at least, prompt the system to force an actual IRS employee to recheck your tax return. These are just some of the many known IRS audit flags but there are a great deal more that most people still don't know about. However, knowing what to look out for helps you avoid IRS trouble. |
|
 |
|
PLEASE VISIT THE CONTRIBUTOR'S WEBSITE
No reactions yet.
Please login or sign up to rate this intel.
Please login or sign up to add a comment.
The copyright for this content entitled "Some Common IRS Flags for Audits" has been specified by the contributor as:
All Rights Reserved
This content may not be copied, distributed or adapted by anyone under any circumstances.
|
|
May, 2012
2008
January, February, March, April, May, June, July, August, September, October, November, December
2009
January, February, March, April, May, June, July, August, September, October, November, December
2010
January, February, March, April, May, June, July, August, September, October, November, December
2011
January, February, March, April, May, June, July, August, September, October, November, December
2012
January, February, March, April, May
|
|
Not a member yet?
Qondio is a powerful network for making it online. If you have a website to
promote, we can help.
Sign up and get in on the action.
|
|
Welcome to Qondio! Discover the awesome power this network can deliver by going to our About page. Or you could skip straight to the Sign Up form.
|
|
