Seven Ways to Fight a Tax Audit

7 Ways to Fight a Tax

AuditThere is no way to protect your self 100 percent

from an audit. But as you prepare your tax return, remember these tips to avoid common audit

triggers and to be prepared should an audit occur.

Avoid Round Numbers

A tax return with lots of round numbers - $1,200 in travel expenses or $1,500 in charitable contributions – suggests that you may be fudging the numbers a little. Be sure to keep good records of your expenses to ensure you use

accurate dollar amounts on your tax return.

 Explain on Paper What You Can't with E-filing

Tax preparation software makes for easier and more accurate tax return preparation. However, tax prep software typically does not provide the option to include disclosure statements or to provide an explanation for income or expenses that are unusual. If there is something not quite normal about your return, submit a paper

return with a type-written note explaining any abnormalities.

Double-Check Your Math

Bad math on a paper return can definitely trigger an audit. One of the more common mistakes people make on paper returns is putting the correct number on the wrong line. This kind of mistake has the potential to significantly skew your figures.

Always be sure to double check your numbers are both added correctly and are in the correct place.

Mind Each Line

Another common mistake taxpayers make on their tax returns is forgetting to input basic information, like name, Social Security Number and address or neglecting to sign

the return. Normally, these mistakes will not trigger an audit, but if you repeatedly neglect to sign your return, the IRS could flag it for possible fraud and pay more attention to

your returns in the future.

Document Your Donations

Seemingly excessive charitable donations are a sure way to raise the IRS’ attention. The norm for charitable donations is about 2% of annual income, anything above that, the IRS may want to look

more closely at your return. When using the deduction for charitable donations, always be sure you can back up your

claims with a letter or receipt from the charity.

Keep Records Beyond Receipts

Commingling, the mingling of business and personal expenses is another one of the more common mistakes that taxpayers,

especially taxpayers who own businesses, make. For this reason, always be sure to keep logs or records in addition to receipts for certain expenses. For example, if you meet with potential clients

over dinner, but sure to have a clear record that the meeting was for business purposes, and not a night out with friends.

Track Your Bank Transfers

If your return is audited, the auditor will run a total of all deposits made in your bank accounts. If you tend to move money around

between accounts, it may look like you’ve had much more income deposited than reality. Be prepared to document these transfers carefully to show that a deposit doesn't necessarily

equal new income.

To Learn MoreVisit

www.taxassistancegroup.orgOr Call

(855) 549-7829

Works Cited: Kirchheimer, Sid. "7 Ways to Fight a Tax Audit." AARP.org. AARP, November 2011. Web. 18 June 2015. <http://www.aarp.org/money/taxes/info-12-2010/seven_ways_to_fight_a_tax_audit.1.html>