Taxpayers can get flagged for forgetting important forms, mixing up numbers, or exaggerating tax breaks. Even one mistake can alert the Internal Revenue Service (IRS) to take a closer look at your return. While there is no such thing as “audit proofing” a tax return, there are some precautions to take to reduce the chances of an audit.
- First and most important is ACCURACY! Review your return and required schedules for numerical errors before submitting to the IRS. Numerical errors are one of the top mistakes that the IRS reports each year. Hiring a tax professional or using a tax software is helpful in this process. However, the data you provide to them must be accurate.
- Be mindful of your deductions. The IRS maintains databases that contain the “normal” amount of deductions compared to income. Any filings outside of the range come under higher scrutiny/suspicion than others.
- Double check all Federal ID numbers. This includes social security numbers, individual taxpayer numbers, and payer identification numbers. For E-Filed returns, all payer Federal I.D. numbers must match up to the forms received by the IRS or automatic kickbacks will occur.
- Last but not least, review, review, and review before submitting your return!
Remember, an audit is just the IRS asking for an explanation of the information you’ve provided on your return. If you receive an audit request letter and have questions, contact us. We’re always here to help!
Thomas serves as one of the lead tax partners and is a subject matter expert in tax compliance and structuring. He has over 40 years of experience in tax compliance and financial management. Connect with Thomas on LinkedIn or follow him on Twitter @thomascpa.
Dee Ann Creach is a manager in the tax practice where she leads the preparation of hundreds of tax returns. She has over 32 years of experience and is passionate about tax planning and optimization. Connect with Dee Ann via email.