To hear some people tell it, a tax audit is a fate worse than death—and while this is surely an overstatement, the professionals at Wall and Associates Inc agree that avoiding a tax audit is desirable whenever possible. Many American taxpayers may balk at this notion, believing tax audits to be essentially matters of pure bad luck—but those whom the IRS audits are hardly chosen randomly. As such, there are specific steps that individuals can take to minimize their risk of being chosen for this dubious honor.
But what are those steps, exactly? Wall and Associates Inc reviews them, in the paragraphs that follow.
Wall and Associates Inc Shares Tips for Avoiding Audits
The first step toward avoiding a tax audit, according to Wall and Associates Inc, is understanding just how the selection process works. It’s usually anything but random—and while some people probably are audited because of “bad luck,” the IRS does have a methodical selection process that it implements. Actually, it selects audit cases using a sophisticated computer algorithm, which compares different tax returns from the same income bracket and looks for wild variances in deductions. Audits can be conducted for other reasons, including random audits.
Does this mean that taxpayers should be scared to take legal, reasonable deductions? Absolutely not! It just means that having some documentation to back up those deductions—proving them to be above-board—is imperative. Keeping notes, receipts, and other documentation is always safest.
Another important consideration: What are the most frequently questioned deductions? According to Wall and Associates Inc, there are a handful of especially common flags that the IRS looks for. These include casualty losses, home office deductions, business travel expenses, medical expenses, and charitable contributions.
Of course, the goal for any taxpayer is—quite frankly—to avoid IRS scrutiny as best as possible. Flying under the radar is the name of the game, then—and the best way to do so is to file a correct and accurate return the first time, without needing to revise it down the road. Yes, it is possible to amend your tax return. However it is better to get things right the first time and avoid amendments, as best as possible.
Wall and Associates Inc also says that filing early does not help one’s chances of avoiding an audit. With that said, there is no excuse for not paying all taxes on time, and a failure to do so can result in steep penalties and interest!
A final consideration from Wall and Associates Inc: Double-check everything. Even those who are very good at math need to take the time to review their work with a calculator, and to ensure they have not made any sloppy errors. The best way to avoid an audit, really, is just not to make any big mistakes and be truthful. This means not leaving any fields blank. Rather than invite IRS speculation, put a dash or a zero in these areas, rather than leaving them empty. And of course, minor errors are best avoided by working with a trained tax professional—though even this does not guarantee flawlessness.
None of these tips and techniques is guaranteed to prevent audits. There is no way to know for sure whether a tax return will receive IRS scrutiny. With that said, following all of these steps can take the risk of an audit down to practically nothing.
Wall and Associates Inc is a company devoted to helping individuals avoid tax debt, and also to assist them in walking them through the audit process.
*Not a Solicitation for Legal Services*