How to Avoid an IRS Audit

Do you ever worry about being audited by the IRS? There is no for sure way to avoid an audit, but there are many ways to reduce the risk. If you are selected for an audit, it does not mean that you have a mistake in your taxes. According to the IRS those that are audited are randomly chosen, forms may not match the information reported, or the returns selected for the audit involve another taxpayer.

Let us help you avoid an IRS audit.

1.   Don’t rush when filing your taxes. If there are many mistakes on your return, then it sticks out to the IRS. One of the biggest mistakes is people forget to sign their return or include their social security number.  

2.   It is important that you report all of your income. Report all bank interest, child support, gambling’s, etc. Remember, just because you didn’t get a copy of a report that it didn’t get turned in by someone else. 

3.   Make sure you don’t claim false dependents. For example, if you’re divorced make sure the other parent is not claiming the child before you do. If both parents claim the child/children on their return this may flag an audit. 

4.   Be careful when claiming charitable deductions. You don’t want them to be larger than your gross income. This will definitely be a red flag to the IRS.

5.   If your income is more than $200,000, your odds of being audited increase by 3%. If your making more than $1 million your odds increase to more than 8%. 

6.   If you find a mistake after you have filed your return, you can fill out a 1040X within 3 years of the initially filed return and correct the error.  

7.   Don’t forget to file your tax return. Just because you didn’t file doesn’t mean you can’t be audited. The IRS can file on your behalf and then your deductions are kept at a minimum. Subsequently, they can then in return audit your return.  

8.    Avoid rounding your numbers on your return. This most likely will trigger a review of your tax return. 

As you can see, there are many important steps to help prevent an audit; however this does not guarantee you will not be audited. Remember, audits are often random even if there is nothing wrong with your return. It is important to remember that if you make a mistake and you were not trying to actually “cheat” the government, the IRS can be lenient.

Here at Professor Tax USA we will represent you or your business if you are ever audited by the IRS. For our clients, we not only prepare your company's taxes, BUT we file your personal taxes FREE of charge. If you have any questions, or want to find out more you can call or email “The Professor” anytime.