Common Reasons Why You May Be Audited for Your Taxes

Do you get stressed or frustrated every time you look at your paycheck and see your tax deductions? Do you count down the days until April 15th? Well, you’re not alone. Many people absolutely dread filing their taxes and become paranoid that they’ll be audited. Unfortunately, audits are extremely common, due to excessive numbers of human errors, mistakes, and fraud attempts.

Audit Flags

Fortunately, you can help avoid an audit by making sure you know the common errors and patterns that the IRS typically flag for audit reviews. When you file your tax forms, the IRS diligently cross-references them to look for potential patterns and indications of fraudulent activity. These include:

  1. A lot of math mistakes. The IRS knows that math errors occur, and it expects an occasional arithmetic error here and there. However, if there is an established pattern of a lot of math mistakes, the tax form will be flagged for carelessness, and all the information will need to be investigated and recalculated to check for fraud or large discrepancies.
  2. Unusually large deductions. Although you have the right to deducting home office and work-related expenses, large deductible amounts or costly expenditures can trigger an audit. For example, deducting a flat screen TV, a leather couch, and a stereo system because you occasionally work in your living room is not an appropriate deduction, and will be considered fraudulent.
  3. Income discrepancies. If your income drastically changes from month to month without explanation, or if the amount of taxes being withheld varies significantly, the IRS may find reason to look into your finances.
  4. Rounded numbers. Round, even numbers can be extremely suspicious on a tax form. Although it may occasionally happen, estimating a deductible as $1,000 when the true number was $963.50, or stating you only made $20,000 that year instead of $26,439.95 could land you in hot water and cause the IRS to demand receipts and copies of pay stubs.
  5. Too many charitable donations. Although donating to charities is a wonderful humanitarian choice, claiming to have donated half of your annual salary isn’t believable. If your form suggests that you’re attempting to deduct an absurd amount in charitable donations in order to receive a tax break, your form will most likely be flagged.

Tax season can be an extremely stressful time. Take the worry out of an audit by avoiding these common errors and filling out your forms as honestly and as correctly as you can. If you’re still worried about potential problems, contact us directly to get the peace of mind you deserve. We can help you understand your rights and make sure the IRS doesn’t take advantage of you.

Call now to talk to an experienced lawyer and learn your options before getting a notice in the mail. Don’t let the government take away your hard-earned money, or worse, prosecute you for accounting errors. Call today!