While many Internal Revenue Service tax audits are conducted randomly, there are certain factors that might trigger audits. When the information on one document does not match the information on the other, such as the income reported does not correspond with the income on a W-2, the chances of getting audited are high. Similarly, if someone’s automatic deductions are more than for others in that profession, they are assigned a high Discriminant Inventory Function System Score, and the higher the score, the more likely the audit. Lastly, the more someone earns, the more likely they are to get audited.
There are also some steps Austin residents can take in an attempt to reduce the chances of getting audited. One of the most important tips is to double-check one’s math. Correct numbers on the wrong line or incorrect addition can trigger an audit that could have been avoided if reviewed.
Filers should also avoid round numbers. A tax return with lots of odd numbers may be a sign that the filer is estimating rather than providing accurate information. The IRS often goes after people who do not keep good records, which is also why it’s important to keep relevant information for at least the last three years from the filing date. Additionally, receipts may not be enough documentation to prove a claim one is making. It can help to jot down records to bolster one’s claim, such as dinner with a client, rather than simply have a receipt for dinner.
An audit is a headache and can be stressful for those about to go through it. in order to minimize the risks of getting audited or to ensure that one knows about the IRS audit defenses and appeals, it might be helpful to consider an experienced attorney for guidance.