Internal Revenue Service change Rules for Tax Audit in Sep.
By: Mary Jones
Traveling knowledge
What Is a Tax Audit?
Every year, the IRS selects numerous tax returns for audits. This process essentially involves having your return inspected by an IRS representative.
What Can Trigger a Tax Audit?
IRS doesn't specify exactly why it chooses some returns for audits and not others. Again, it's worth noting that some selections are made entirely at random
Audited After You've Received a Refund?
what the audit turns up (or doesn't). Tax audits can result in no corrections or corrections with a taxpayer either owing more or being entitled to a larger refund
Why the IRS audits people
Sometimes an IRS audit is random, but the IRS often selects taxpayers based on suspicious activity.
Making math errors
When the IRS starts investigating, “oops” isn’t going to cut it. Don’t make mistakes. This applies to everyone who must file taxes. Don’t accidentally write a 3 instead of an 8.
What are the chances?
The IRS audits thousands of tax returns every year. Click on your income range to see how many people like you had their tax returns audited last year.
Failing to report some income
Let’s say you’re employed herding sheep for Farmer Joe and you pick up a little extra cash writing articles for a sheep-shearing publication on a freelance basis.
Claiming too many charitable donations
If you made significant contributions to charity, you’re eligible for some well-deserved deductions. This bit of advice is common sense:
Reporting too many losses on a Schedule
This one is for the self-employed. If you are your own boss, you might be tempted to hide income by filing personal expenses as business expenses.
Deducting too many business expenses
Along the same lines as reporting too many losses is reporting too many expenses. To be eligible for a deduction, necessary to your business.
Claiming a home office deduction
The IRS narrowly defines the home office deduction as reserved for people who use part of their home “exclusively and regularly for your trade or business