How to Navigate an Individual Tax Audit
While it is accurate to say that the IRS has audited significantly fewer people, less than 1% of individual tax returns are audited and the majority of audits nowadays are handled from a distance rather than in person, these changes do not mean that you will never be selected by the IRS for an in-person audit of your tax forms.
How to prevent an audit from the IRS
So, what are key warning signs that you can look out for if you want to decrease the odds of attracting unwanted attention from the IRS? Here are seven actions that you must avoid when you file your taxes every year:
Mistakes related to math or numbers, such as accidentally inputting a three instead of an eight or unintentionally failing to add a zero where necessary, can cause the IRS to look more closely at your tax forms. Choosing to round up your numbers instead of including the exact digits can raise red flags as well.
Stop yourself from making estimations or raising values to the nearest dollar. If you are not as accurate as possible, you could end up having to pay significant fines if you engage in this type of behavior, no matter if your mistake was intentional or accidental. Generally speaking, the IRS might come across these problems when agents are merely double-checking your numbers when ensuring there are no discrepancies within your return.
None of the aforementioned details suggest that you should avoid claiming credits or deductions that you are legitimately entitled to for the sake of ensuring you will avoid an audit from the IRS. Rather, hire a qualified tax professional who can help you ensure that you are in compliance with the rules of the IRS. Always keep proof of your claims and hold onto copies of documentation that support the information within your tax return.
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