Monday, April 11, 2011

IRS Audit Red Flags: 12 hot spots to raise scrutiny from the IRS

#1 and #12.  Yep, I raised IRS scrutiny on my 2003 taxes because of mistake #1 (I didn't receive an interest statement in the mail for $146 of interest income on one of my old employer managed 401k's) and #12 (I took higher than normal deductions for charitable contributions which resulted in me needing to get cancelled checks to PROVE that I really gave the donations-which I did, by the way).  :)

My advice is to take your time and gather ALL your information together before you get ready to prepare your taxes, whether you do it yourself or have a professional do it for you.  THEN, since you have done such a great job of gathering, do a great job of storing your information, just in case you get a mail audit (more common every year) or a full blown audit (there's where a professionally prepared tax return pays dividends!).

Here is a list of 12 IRS Audit Red Flags to help keep you out of hot water: The IRS Dirty Dozen

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