Your Odds of an IRS Audit

Have you ever wondered about the odds of being audited? Internal Revenue Service (IRS) data points to an overall audit rates to be quite low for individuals with income under $400,000. While the IRS promises not to increase the overall number of audits it conducts annually on individual taxpayers, certain triggers remain in place that can increase the chances of a return being audited, such as:

• Having a large income (the IRS gets a better payback for audit efforts among the wealthy)
• Being self-employed
• A 1099 mismatch (you show a $5,000 capital gain; the financial institution reports $15,000)
• Deductions that appear “puffed up” or outside of the norm
• Claiming a large non-cash donation
• Missing or incomplete information, such as missing or incorrect Social Security numbers
  

The good news is there are easy ways to help reduce the chances of an IRS audit at any income level. Working with a qualified tax professional may also help reduce errors on your return while helping to assure your tax and investment strategies are aligned; identifying and implementing strategies for reducing or minimizing taxes; and preparing your tax returns in a timely and accurate manner. Call today if you have any questions.

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^{This communication is designed to provide accurate and authoritative information on the subjects covered. It is not, however, intended to provide specific legal, tax, or other professional advice. For specific professional assistance, the services of an appropriate professional should be sought.}