How to Avoid IRS Audit Flags

Series Summary

IRS! Most people see those three letters and immediately go into panic mode. Everything about income taxes seems to be a hassle. If you don't know what you are doing, you may find yourself in a world of trouble. However, how do you learn what tax deductions you are eligible for? What do you do if you get a letter from the IRS? Are you going to have to file a tax extension? Do you have to pay tax penalties? There are so many unanswered questions that loom in the gray world of the Internal Revenue Service. If you are worried about tax audits, Diana Crawford describes the process, and gives you tips for avoiding the audit in the first place. So, don't let April 15th catch you off guard. Get tax help today! In this series of tax filing videos, our accounting expert will tell you several ways to avoid a tax audit. Learn what the IRS looks for when deciding who to audit. Find out tips for reporting rental income and various other deductions. Should you expect an audit if a company you hold shares in gets audited? Watch this series and find out.

Video Transcript

"How to avoid an IRS audit. Whether your return is prepared by hand or your return is computer generated, there are somethings that you need to make sure of when submitting your returns. First of all you want to make sure that all social security numbers are correct and accurate and have been completed for both the tax payer, the spouse and for all the dependents. You want to make sure that whether your return is computer generated or prepared by hand that all the numbers foot down the return. That if any of your numbers have been edited or changed make sure that all of the math is accurate on the return. The information on page one of the return, your ten forty if that is the form you are filing, flows over into page two of the return. That all of the information shown as withholding on the return is supported by W-two's or ten ninety-nine statements as well. So then that will result will be in agreement with the IRS' records. Make sure also that you sign your return and date it before submitting your return. Returns should be prepared and submitted in order, first is the first two pages of the ten forty, those are followed by each of the individual forms that support the return. If you are filing Schedule A that should be next in the return. All of the supporting schedules should then be placed in the return alphabetically. A,B,C,D it just keeps going all of the alphabetical returns first and then all the numeric forms, you might have a forty-five sixty-two or forty-seven ninety-seven, those follow the alphabetical returns and they should be in numeric order after the alphabetical returns, your ten forty goes first. Make sure that your return is not sloppy, as complete, accurate and concise as your return can be, is best for you. If the IRS can not discern what numbers are, then they have to guess and that is not to your best advantage. So make sure the return is legible, neat and completed with all the blanks filled in that need to be. That is the best way that you can help avoid an IRS audit."