What Red Flags Can Increase My Chances Of Being Audited By the IRS

Описание: Learn about the "red flags" that influence the IRS in their decision whether or not to audit you. For more information about IRS audits, please visit: http://thetaxlawyer.com/irs-audit

The IRS uses red flags in order to determine which tax returns to audit. Some of the biggest ones is if you are reporting high income. They can generate more of an audit adjustment from them than from the other tax returns, so they audit people with high income. Another thing they do is they take a look at the deductions. If the deductions are so large that they're unreasonable, or out of the ordinary for that type of business, then they'll audit those tax returns.

They also audit large charitable contributions. Another thing that they'll take a look at is businesses that generally deal in cash. Contractors deal a lot of times in cash. They pay their workers in cash. Those are the types of things that they'll audit.

Another red flag is if the IRS knows about a tax preparer that they have a poor reputation, or that they've had audits and they've gone very badly for them, the IRS will audit more of their clients than anybody else. We happen to know who the people with the poor reputation are in the community, but those are the ones that you really want to stay away from.