Tax Audits are on the Rise
Tip It!With just two days to go before the tax filing deadline, keep in mind that audits have been on the rise in recent years. In fact, according to an article from H&R Block’s Tax Advice Central, American have a 1 in 107 chance of being audited, and the likelihood jumps to 1 in 63 if you make over $100k. According to the article, the two most common mistakes that result in closer IRS scrutiny are: (1) failure to sign your return, and (2) inclusion of incorrect social security numbers. The article goes on to say that the most likely audit red flags are unreported income, itemized dedcuctions, casualty losses, and hobby losses. (see also my earlier article on audit red flags). If you’d like to avoid an audit, or at leas survive the process, Block recommends learning the rules about what has to be reported, keeping up with what is and isn’t deductible, and keeping meticulous records. If all else fails, be sure to check out my article on tips for fighting an audit.
Published on April 15th, 2006 - One Comment
Filed under: Taxes
About the author: Nickel is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!
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November 1st, 2010 at 12:05 pm
Another big problem with tax audits is going to H&R BLOCK HEAD tax preparation and have them handle something hard like the tax liability on a tax rollover of an IRA and you end up getting a letter from the IRS for 25,000
Went to a reputable accountant local and ended up having to pay only a couple of thousand no where near that figure. H&R BLOCK did not even ask to fill out an amended form for the year it was messed up.
BEWARE!!!!!!!!!!!!!!!