How to Report Tax Shelters on IRS Forms

Video Transcript

"How to avoid an IRS audit. One of the things that will certainly get you in line to be added to the top of the list for IRS audits it your investment and risky tax shelters. This is just something that exposes you to the potential, or further potential for an IRS audit. If you invest in certain tax shelters, then there is a required investor reporting of a tax registration number. These are for certain tax shelters that must be registered with the IRS. Your involvement in some of these tax shelters may or may not add to the likelihood that you could be audited by the IRS. So the more risky your investments in a tax realm, the more likelihood your tax return could be selected for audit. Why is this? Because if you're willing to take risks, unnecessary or frivolous risk from an IRS perspective, than there may be other areas on your tax return that could also be risky as well. So if you're involved in risky tax shelters, it may just move you a little bit to the head of the list for an IRS audit. If you want to avoid an IRS audit, you might want to avoid the ultra risky tax shelters as well."