How to Avoid A IRS Audit

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By Amy Laine
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Avoid A IRS Audit

Just like the average US small business and family in a down economy, government programs are working hard to make it. So the IRS will be extra careful that all tax owed is paid. No one likes to be audited. The IRS relies on computer software to flag potential tax payers for audits. Learn how to avoid a IRS Audit by working with their computer program.

Difficulty: Moderate

Instructions

Step 1

Be average: A taxpayer that shows tax right offs that are not with in norm of there tax bracket is more likely to get audit's. For example, if someone claims to have donated $10,000 to a charity and only show a yearly income of $20,000 the IRS software will probably flag their return.
Step 2

If you make such donations as explained in step one or have unusual claims attach receipts or a short explanation to your tax returns.
Step 3

Double check your eligibility for a tax deduction before it is taken, especially in the area of home business and business entertainment. If you take a claim, always be able to prove it if requested.
Step 4

Avoid using creative tax shelters. When auditors are looking for more money, they tend to look through files that use tax shelters illegally. Always check with multiple Accountants before using a tax shelter.
Step 5

Do not take any deductions that you can not provide proof of eligibility.

Tips & Warnings

To avoid a IRS Audit, always be honest. So even if you get audited you will be fine.
Never joke with anyone about cheating on taxes in any form, even if it is just a joke. Large rewards are given to those who report Tax fraud. With the down economy, do not tempt anyone.