Wednesday, August 8, 2012

How to Tell If Your, Tax Return May Be Audited, and How the IRS Selects Returns for Audit


Most tax returns are accepted by the IRS without a problem.  E-filing a tax return is an excellent way to reduce the chances of being audited. 
The IRS uses several methods to determine which returns that will be audited.  These methods include, random sampling, computerized screening and comparison of information received by the IRS such as Forms W-2 and 1099s.
Special note:  Once you have completed your return, ask your tax professional, or if you are preparing your own return, click on the report which provides “National Averages Comparison” – you want to be sure that your National Averages are in line with other tax payers in your same income bracket.  (AGI)

If your tax return is very different from the National Average, make sure you understand why.  There may have been a loss, or a gain, high medical bills, etc on your return.
 What every you do, be sure to maintain supporting documentation.
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