Tips On Avoiding Internal Revenue Service Audit

The best way to avoid raising a red flag on your tax return is quite simple: Be accurate. Otherwise, risk the chance of being audited, according to the Internal Revenue Service.

“If the information on the return doesn’t quite jive with your income versus your expenses or deductions or credits, they’re out of wack in terms of amount of income you report or what else you have reported on your tax return, you may get a closer look,” said Raphael Tulino, an IRS spokesman.

And to play it safe, the IRS recommends you keep receipts and good records so you can back up what you report.

“An accurate return, it is going to get you a quick refund and all those things, right? But at the same time, if you’re asked about and you have substantiation behind it, then you’ll be in good shape,” said Tulino.

With approximately 140 million taxpayers in the U.S., it’s a daunting task for the IRS to comb over every return. Statistics show people in the higher income brackets are among those who get more scrutiny.

“For example, if you’re in the seven-digit range, we’re definitely putting a lot more resources to those folks in the higher income range,” said Tulino. “Those that self-report, small business owners, those who deal in cash-based businesses who file a schedule C are self-employed. If you’re self-reporting, perhaps you’re going to get a closer look.”

Again, regardless of your financial situation, honesty is the best policy to avoid an audit.

“Do an accurate return the first time. Nobody wants correspondence with the IRS more than once, which is submission of the return and being over it,” said Tulino.