IRS Audit: What to Watch Out For; The Self-Employed Are in the Bullseye
IRS audits are specifically targeted on those returns where the expected payoff amount is greatest. The self-employed are usually targeted the most.
New York, NY (PRWEB) April 4, 2005 -– Tax-Definition.org (http://www.tax-definition.org) is announcing the following IRS
Audit Tips-
Tax Tips for IRS Audits:
http://www.tax-definition.org/irs-audit/
According to
latest reports, the Internal Revenue Service, or IRS, is increasing the total
number of income tax returns selected for audit. But it isn’t as bad as it
sounds, because the audit rate has actually gone down. On an average, the IRS
audits around 1 percent Americans every year. That minimizes your chances for
receiving an audit notice from the IRS, but doesn’t completely rule it
out.
On your part, you need to ensure that your tax return doesn’t
attract unwarranted importance. This becomes more important if you’ve made some
manipulations in your returns. Your objective should be to show your returns to
be as normal as possible so that they mix in with the innumerable other returns.
Still, many Americans do make the mistake of showing huge deductions or losses
in their returns, which makes IRS audits inevitable.
If you, too, have
filed an income tax return that gets selected for IRS audit, then there are a
few things that you need to remember. IRS audits are specifically targeted on
those returns where the expected payoff amount is greatest. The self-employed
are usually targeted the most; if you happen to be one, be ready to backup your
business expenses. Even while filing the returns, if you’ve claimed a deduction
that’s higher than average, it’s better to attach supporting documents along
with the return. This won’t only prove to the IRS that your deduction is
genuine, it will also discourage further IRS audits.
Whatever the primary
focus of the audit might be, during the audit the IRS auditor gives maximum
importance to the entertainment, meal, and auto deduction records. In order to
ensure that your IRS audit goes well, you can follow these tips:
-
During an audit, you need to show documents to prove any of your credit,
deduction, or exemption claims that the IRS is questioning.
- You are well
within your rights to ask for more time for the audit, that is, postpone the
date of the audit in order to get your papers in order.
- Don’t provide any
more information than what is asked for.
- Try not to have the audit at your
home or office. Go to the IRS office with all the documents, or you can even
have your tax professional represent you.
- It’s always better to consult a
tax professional as soon as you’re notified about the audit. Even while the
audit is in progress, you can always ask for a break to consult your tax
professional. You can claim deduction for the fee you pay to a tax professional
for audit representation.
- If during the audit, you feel that the auditor is
not treating you properly, you’ve every right to ask for the auditor’s
manager.
- If you don’t agree with the outcome of the audit, you can
appeal.
- Chances are, you’ll have to end up paying some amount, so be
prepared.
It is in the best of your interest to consult a tax
professional for the audit. And even if you feel that you can handle the audit
on your own, do inform your tax professional to get a briefing about the audit,
as well as to have the required documents in order.
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(C) 2005 Tax-Definition.org
http://www.tax-definition.org
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Source : http://www.prweb.com/releases/2005/4/prweb223799.htm