Home | Tax Blog | Tax Evaluation | Resources | Common Tax Questions | Back Taxes | Contact Us

Tax Returns Likely to Face Audit: Know the Risks

September 16th

Every year the IRS flags certain taxpayers for audit. In some cases it is because the taxpayer has already been flagged for tax fraud, but in many instances they are simply chosen at random. For random audits the IRS uses the Discriminant Function, which is a highly secret method of determining who will face audit in a given year.

However, in other cases, the IRS chooses certain types of returns that will be a particular area of focus. Taxpayers with returns that fall into one of the following categories must accept the fact that they are more likely to face a tax audit. If you qualify in one of these areas, it is a good idea to consult with a qualified tax lawyer in order to ensure that you will have no unpaid taxes or unfiled returns.

1. Returns with Itemized Deductions. Taxpayers who file a Schedule A with their Form 1040 are more likely to face audit than other taxpayers. Additional calculations involved in the filing of an itemized deduction attract more taxpayer errors and fraud.

2. Self-Employed. Those taxpayers who are self-employed are also more likely to face audit than those in traditional employment. This is because more expenses may be claimed by self-employed individuals than by others, including home offices and travel. If you report a net loss for the year be prepared; you are especially vulnerable to examination by the IRS.

3. Small Businesses. All small businesses, even seemingly innocuous ones, are particularly vulnerable to IRS audit. This is because many small business owners do not understand how to properly file their tax returns and are thus more prone to making mistakes. If you own a small business, consider investing in the assistance of a qualified tax attorney to guide you through the process. In the long run, the investment could save you valuable dollars by avoiding penalties and interest on unpaid taxes.

 
 
RSS

Subscribe Now
Social

Follow on FaceBook
News & Events
Monday, August 01, 2011

We are excited to launch our new site LeeTaxHelp.com.
Monday, September 05, 2011

If you think you might be need the advice of a Dallas Bankruptcy Attorney you can view on sister site at http://leebankruptcy.com
Categories
Back Taxes (5) General Tax Information (65) News (39) Payroll Taxes (5) Tax audit (10) Tax Debts (3) Tax deductions (16) Tax Fraud (4) Tax Laws (14) Tax Liens (10) Tax payment plans (14) Tax programs (21) Tax Scams (6) Uncategorized (2)
Recent Posts
Advantages of Using a Tax Debt Lawyer
Tax Debt Relief In 2014
Tax Debt Installment Agreements
Understanding the Five Tax Debt Strategies
Back Taxes: What You Can Do
Archives
January 2014
December 2013
November 2013
October 2013
September 2013
August 2013
July 2013
June 2013
May 2013
April 2013
March 2013
February 2013
January 2013
December 2012
November 2012
October 2012
September 2012
August 2012
July 2012
June 2012
May 2012
April 2012
March 2012
February 2012
January 2012
December 2011
November 2011
October 2011
September 2011
August 2011