Top audit triggers that can be prevented
Most taxpayers know that certain actions, such as filing a fraudulent income tax return, can land them in trouble with Uncle Sam. But there are also a lot of small and sometimes overlooked actions or mistakes that can also catch the federal tax agency's eye, and trigger more inquiry into a taxpayer's return. Even though simple mistakes can usually be cleared up quickly, most Americans want to avoid any correspondence with the IRS altogether. Therefore, it's important to be aware of other activities that may stand out to the government.
First and foremost, individuals should file their taxes each and every filing season. While this may seem like a simple and obvious solution to an audit, some individuals who have a low-income or do not expect to owe or get a refund may dismiss their need to file taxes, according to CNN Money. However, this is one of the quickest ways to get the tax agency's attention. When an employer sends a W-2 to a worker, and other third parties generate tax forms, these documents are also duplicated and sent to the IRS. This method is how the tax agency matches up with a taxpayer reports with what other employers and agencies provide to the government. So when an individual fails to file taxes, the IRS is alerted immediately and may audit the filer.
Second, it's easy to make simple mathematical errors or misspellings when filling out tax forms in a rush. But certain errors, such as listing the wrong Social Security number, can spell trouble for filers. The IRS uses an individual's Social Security information to match them up in their system. So when the numbers are off, the IRS may be forced to delve into that person's file a litte more closely. This is a common mistake newlyweds tend to make when filing taxes for the first time. If spouses change their last name without first notifying the Social Security Administration, their new names may not match up to their Social Security number. To avoid these types of mistakes, it may be helpful to work with a tax preparer who will triple check the information listed and is trained to spot these sorts of errors.
Lastly, adults should be as accurate as possible when claiming deductions - and have all the necessary documentation to back it up. For example, individuals who are charitable may attract the eye of the IRS, which may request supporting evidence of their contributions for the year. Don't be afraid to claim large charitable contributions if they are valid - just make sure to keep all records of these transactions in case the tax agency asks questions.
Liberty Tax Service provides computerized income tax preparation and electronic filing. Each tax office offers customers audit assistance, a money back guarantee, and free tax return checking.
About Liberty Tax Service
Liberty Tax Service is the fastest -growing retail tax preparation company in the industry’s history. Founded in 1997 by CEO John T. Hewitt, a pioneer in the tax industry, Liberty Tax Service has prepared over 8,000,000 individual income tax returns. With 42 years of tax industry experience, Hewitt stands as the most experienced CEO in the tax preparation business, having also founded Jackson Hewitt Tax Service.
Liberty Tax Service is the only tax franchise on the Forbes “Top 20 Franchises to Start,” and ranks #1 of the tax franchises on the Entrepreneur “Franchise 500.” Each office provides computerized income tax preparation, electronic filing, and online filing through eSmart Tax.