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Recent Posts:


  • Who is At Risk for an Audit?

  • Business Taxes: What Can I Deduct?

  • Multi-State Tax Returns

  • Tax Problems and Solutions for Individuals

  • What is an Enrolled Agent?

  • Divorce and Taxes

  • Understanding the IRS




  • Who is At Risk for an Audit?

    The IRS is uniquely equipped to claim unpaid or overdue taxes, whether by garnishing wages or repossessing an individual’s personal assets. Many people may fear an audit for these reasons, but the IRS and state-level agencies aren’t out to get every taxpayer. IRS representatives are eager to settle disputes and are only concerned with focusing on those who are exploiting the system or are not honest on their tax returns.

    The following guide describes those who are at increased risk for an IRS audit:

    Tax Evasion and Inaccurate Reporting

    The audit system is designed to discover individuals who are not fully disclosing their income. However, only a small percentage of returns are flagged and an even smaller percentage of those receive an audit. IRS and state revenue departments look for individuals who have not paid taxes for many years, have held on to a large sum of money, or those who have a significant amount of international income. They are primarily concerned with the amount to be gained from an audit, although this does not guarantee smaller amounts will not draw their attention.

    Unique Tax Situations

    Tax revenue agencies may pay more attention to individual and businesses whose returns stand out in comparison to others in a similar income bracket. Sole proprietors, for example, have the opportunity to make a large amount of income and take advantage of loopholes to evade tax payments. Not-for-profit organizations are another entity that is often scrutinized for correct use and reporting of funds.

    Taxpayers with international income or US citizens abroad also receive more attention from the IRS. International tax laws allow the IRS to fully operate across borders, which many people may not realize. They see income from abroad the same as domestic income, which may mean personal or business income is taxable by multiple governments, which also changes the available deductions.

    Improve Compliance: Report Everything

    Taxpayers may not realize that all transactions must be reported to tax agencies -- from the trading of goods for other goods, to cash payments and tips. Although many get by without reporting these items, they can be a trigger for an audit notice. The same goes for home improvement projects or home office renovations, which change eligibility for tax deductions and credits. Anything that affects the value of property or usable business space in a private residence needs to be reported.

    Need Help with an Audit or Reporting Complex Income?

    Contact tax expert and Enrolled Agent, Mark Witecki, CPA for comprehensive tax accounting and assistance in the event of an IRS audit. Call for a consultation today!


    Mark Witecki | 12/20/2017



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