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

How to keep IRS auditors at bay this tax season

The April 15 deadline for filing individual and business tax returns is quickly approaching. As Ohio residents wait for or attempt to locate necessary tax-related documents, many likely have questions and concerns about whether they can look forward to a refund or will be stuck paying Uncle Sam. As individuals and business owners prepare tax documents and forms, it's wise to remember the types of red flags that may catch the attention of the IRS.

The IRS is able to access and cross-reference a vast amount of personal identifying and financial data. While the agency isn't about to share its formula for how it selects who to audit, there are things taxpayers should avoid doing.

For individuals or business owners who deal in cash, it's important to remember that all earned cash income must be claimed. In addition to claiming all assets earned as income, individuals would also be wise to keep accurate and detailed financial records. If audited, the IRS will likely ask a taxpayer to produce this type of documentation.

Taxpayers who claim too many tax credits may also be subject to more scrutiny by the IRS. If an individual hires a professional tax preparer, it's wise to double check on the qualifying criteria for certain tax credits to ensure a preparer isn't breaking any laws in order to gain more business. It’s always a good idea to make sure a tax preparer is playing by the IRS’s rules as no matter who prepares a tax form, the individual taxpayer will pay the price for any inaccuracies.

In cases where an individual learns he or she is being audited, it's often advisable to comply with any requests from an IRS auditor. In cases where a taxpayer fears possible criminal charges related to tax evasion or tax fraud, it's wise to seek the advice and assistance of an attorney.

Source: Money Talks News, "Tax Hacks 2014: 8 Tips to Avoid an Audit," Allison Martin, Jan. 22, 2014

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