Accuracy can help minimize chance of an audit

One common, but usually unfounded, concern that taxpayers share during any given filing season is the fear that they could end up facing an audit from the Internal Revenue Service.

Fortunately, audits only affect a minute percentage of taxpayers, although there are generally considered to be some red flags that can help increase a person's chances of facing one.

For example, a recent Boston Globe article noted that there is a degree of randomness to the process of deciding whether to audit a taxpayer, while adding that 1.4 million tax returns were examined for the fiscal year that ended on September 30, 2009.

That said, the Globe also pointed out that some factors that tend to increase the risk of an audit include W-2 and 1099 forms that are inconsistent with one's tax return, deductions associated with a home office - especially if they are not properly documented - and having a high income or international bank accounts.

Given the general complexity of the tax code, it makes sense for people to consult with a skilled tax preparer to ensure that their returns are as accurate as possible and to also be sure that they are taking advantage of the full range of credits and deductions that may be available to them.

Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in this blog. Please use your discretion before making any decisions based on the information provided. This blog is not intended to be a substitute for seeking professional tax advice based on your individual needs.
Posted To: Tax Ranger's Blog By: Tax Ranger On: Thursday, March 04, 2010
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