Normal IRS Audit Flags

Two things in life are guaranteed to make everyone cringe: root canals and IRS audit. You will be able to avoid a root canal if you take care of your teeth. Similarly, you'll be able to avoid an IRS audit by avoiding particular practices and take care of your financial well-being. The IRS may have to audit you if many red flags appear.

In an audit, the accuracy of your tax returns is determined by the IRS. You need to be able to prove particular deductions.

Remember these IRS audit flags:

* Making over $100,000.
* Considerable income changes. Proof of which is required.
* Charitable donations are too much. Donations must be proven with receipts.
* Inconsistencies in current and past returns. You should be able to prove that you had a name change, address change, etc.
* If self-employed, too much deductions.
* Inconsistent state and federal returns.
* Tax returns are unreadable or incomplete.

By truthfully filing your tax returns, you can steer clear of an audit by the IRS. Documentation need to be saved for at least three years. Follow the following tips to avoid more problems:

* Know your rights like you can conduct the audit by mail and you do not need to meet with the IRS, pay in installments, and question the audit's accuracy.
* Be prepared to show receipts by gathering documentation.
* Talk to a professional if you find the issue too complex.
* If it's an honest mistake, you have nothing to fear.
* Do not reveal more details than required.
* Do not panic because accuracy is merely checked and you are not being accused of anything.

Prevent your IRS issue from becoming a nightmare. If you cannot avoid audits, stay calm if you are flagged for one. You can always consult a lawyer for help.