How To Avoid An Audit By The Internal Revenue Service Part One

  
     
  By Mallory Megan
  
   
     
  The IRS, armed with more funding and smarter computers, is planning to amp up its audits of individual taxpayers this year. Although if you have high income you are less likely to simply fall below the radar, having a lot of money alone is definitely not the only factor that can trigger an audit. Actually, last year only about 6.4 percent of the country´s 440,000 highest-income tax payers were audited.

What this piece of information means is that there are precautionary actions you can take, or measures you can avoid to decrease your chances of getting audited. In a lot of cases, the less attention you draw to yourself, the less likely you are to get audited.

Many things you can do are no-brainers. For example, be certain that all of the Forms 1099 that you have received for interest, dividend, and other investment receipts are reflected somewhere on your tax return. Generally this will be done on Schedule B. IRS computers are more efficient now and have gotten smarter when it comes to matching the copy of the 1099 that got sent to them with your return, and determining if you left anything out on your return. If it notices any type of omission, the result may be a CP-2000 letter from the IRS giving you thirty days to explain the mismatch, or even the start of an Internal Revenue Service audit.

If you are planning on claiming large deductions for gifts to charity, make sure you meet the 'paperwork requirements.' These include having a receipt or some type of proof on paper for every donation no matter how small, and for each donation of two hundred and fifty dollars or more, written acknowledgment from each charity.

Bear in mind that in the case of these larger donations a canceled check will not be enough. You must have an actual letter from the charity before you can file for the return. The IRS is asking for this paperwork in 'correspondence audits' and then denying deductions that otherwise may have been valid because of untimely or missing paperwork.



  
   
  Article Source: http://interpret.zar.vg   
     
  About The Author
Mallory Megan works for Rapid Recovery Solution and writes articles about medical collection agencies.

  
     
 
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