Tags: Reeves | invite | tax | audit

Jeff Reeves: Bad Math, Excessive Deductions Could Invite Tax Audit

By    |   Tuesday, 24 March 2015 06:20 AM

 
Devastating budget cuts at the IRS have severely reduced the number of audits that the agency conducts, but that doesn't mean you aren't at risk.
 
Jeff Reeves, editor of InvestorPlace.com, cites several issues that could arouse suspicion of your return by the IRS.
 
  • "Typos and bad math," he writes in USA Today. "If the form you get from your employer says one number, and you input a different figure into TurboTax, you could open the door for an IRS audit."
  • "A big one-time change." For example, if you claim a huge deduction that you never have before, that could become a trigger for an audit.
  • Too many deductions. "If a taxpayer has an unusually high amount of itemized deductions given their income levels, an audit is potentially more likely," Paul Dunham, tax managing director at business services firm CBIZ, told Reeves. Make sure you have documentation to back up your deductions.
If you do get audited, Jason Notte of Main Street offers several tips to emerge from the ordeal unscathed. 
 
  • "Make sure it's legit," he writes. More scam artists than ever are prowling after your personal data. Pretending that they are IRS auditors is one way they try to steal from you. Don't give out any important information to anyone you aren't sure is a legitimate IRS representative, especially if you are contacted by phone or e-mail. An IRS audit almost always starts with a written letter.
  • If it is a legitimate audit, "don't go in alone," Notte advises. "Unless you're especially deft at preparing your taxes and dealing with IRS or state auditors, you're likely going to want someone to either coach you or — in the case of an in-person audit — be in the room to help out."
  • "Get organized." Make sure you have proof of your income and deductions.
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Devastating budget cuts at the IRS have severely reduced the number of audits that the agency conducts, but that doesn't mean you aren't at risk.
Reeves, invite, tax, audit
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2015-20-24
Tuesday, 24 March 2015 06:20 AM
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