Robert J. Fedor, Esq., L.L.C.

Is an IRS audit in your future?

Every American taxpayer could potentially be the subject of an audit by the Internal Revenue Service. While some IRS audits appear to be completely random and the result of pure bad luck, there are definite steps taxpayers can take to increase the likelihood of being audited.

Most Americans dream of amassing large amounts of wealth. One drawback of being considered wealthy, however, is an increased chance of being targeted by the so-called IRS "wealth squads". These squads are comprised of IRS agents who target wealthy Americans and scrutinize their tax returns and tax-related documents to ensure all the numbers match up and make sense.

Another red flag that a taxpayer may be trying to evade paying taxes revolves around underreporting income. The IRS utilizes a complex and sophisticated network to ensure an individual's reported income is accurate and matches data collected from other multiple sources. When data from one source contradicts that of a submitted 1040 form, a taxpayer may be flagged for an audit.

Additionally, when taking tax deductions, taxpayers would be wise to ensure their math is correct and that those deductions listed are accurate and precise amounts and not just estimates. For example, deductions that are perfect round numbers typically signal that an individual failed to keep accurate financial records and may therefore not able to produce evidence to support or defend such deductions.

Individuals who are facing an IRS audit are often anxious and fearful of the results. An attorney who has experience counseling clients who are facing IRS audits can provide advice and guidance through the process and help provide for the best possible legal outcome.

Source: Forbes, "15 Ways To Invite An IRS Audit," William P. Barrett, April, 2013

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