| You don't need to panic if your tax return is selected | | | | error is discovered, on either side, ample opportunity is |
| for audit. In most cases it simply means that your | | | | given to rectify the error so you are still not in danger |
| return was randomly selected, or that your return was | | | | of prison or any other dire consequence unless blatant |
| flagged because it had one or more items that require | | | | fraud of some kind is present. In that case, prison may |
| a closer look. Here are the most common reasons | | | | be a just reward. |
| returns are flagged. | | | | Here are a few steps you can take before the audit |
| If you are self-employed, your chances of being | | | | to ensure that things run as smoothly as possible, and |
| audited increase. | | | | that your return will be quickly accepted by the agent |
| If your income is much higher or lower than the | | | | assigned to you. |
| previous year, someone will probably want to know | | | | 1. Recheck your return, looking for any questionable |
| why. | | | | areas that might raise a question or need further |
| If you are trying to deduct expenses for a home | | | | explanation. |
| office, or you are involved in a partnership, your return | | | | 2. Arrive on time for your appointment. Be calm and |
| is more likely to be flagged. | | | | friendly, and ask for clarification of anything you don't |
| If your income is mainly from tips or rentals, or if you | | | | understand. |
| have lots of money tied up in tax shelters, the | | | | 3. Unless otherwise directed, bring your current tax |
| government may be interested in learning more details | | | | return, and your tax returns for the last three years. |
| about it. | | | | 4. Have proof of all deductions claimed on your return |
| If your return shows a high percentage of deductions | | | | as these are likely to be areas for questioning by the |
| for the amount of income reported, you may be | | | | auditor. Bring original receipts in a small envelope, and |
| audited and required to provide further explanations | | | | be prepared to bring them out if your auditor asks for |
| and proof. | | | | them. |
| If you have large money transfers that are not | | | | 5. If you are involved in a partnership, bring records |
| adequately explained on your return, you can almost | | | | pertaining to the partnership agreement and bank |
| surely expect your return to be flagged. | | | | records if they pertain to your audit. |
| If someone reports paying you a large sum that does | | | | When you are finally prepared for your audit, relax. |
| not show up as income on your own return; or if | | | | Worrying won't help you, and, guess what? Auditors |
| someone simply turns you in for a tax violation, | | | | are people just like you and me. The chances are that |
| chances are high that you will be audited. | | | | you will do just fine and be on your way quickly, done |
| If your annual income is over $100,000, or if you have | | | | with the worry about taxes for another year. You |
| had prior audits, your chances of being audited | | | | should remember that most audits are short and |
| increase greatly. | | | | simple, and end satisfactorily for both the taxpayer and |
| It is impossible to avoid an audit if you are flagged for | | | | for the Internal Revenue Service. |
| one, but you can reduce your chances of having one | | | | Suppose, though, that after your audit ends, you think |
| by making your return as complete and accurate as | | | | you have been unfairly judged, or that a mistake has |
| possible in the first place. | | | | been made in your particular case? All taxpayers are |
| If, after you have done your best to be complete and | | | | entitled to file an appeal if they feel an unjust decision |
| accurate, you still receive a notice that you must | | | | has been reached. If you fit into this category, don't |
| appear for an audit, try not to take it personally. | | | | hesitate to contact your local IRS for the proper form |
| Auditors are not out to, "get you," only to recheck your | | | | to use in filing an appeal. |
| return in your presence to be sure it is correct. If an | | | | |