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5 Ways to Avoid an IRS Tax Audit

You don't want the IRS knocking on your door. But these tips (and a little honesty) will keep you from facing an IRS audit.

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It’s true that the odds of an IRS audit are fairly rare, sitting under 1%. The federal agency has suffered from severe budget cuts over the years, so as a result, the IRS tends to focus their audits on those with large incomes, or where the likelihood of tax issues is high (see: owners of cash businesses).

Tax Audit
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The IRS uses sophisticated computer systems to come up with targets. For the most part, the actions are automated, too, including a series of letters. And you might be relieved to know that the resolution is usually straightforward — you might have to just provide evidence of a deduction or make an extra payment.

It’s important to be proactive, though. Interest and penalties can add up quickly.

And here and there, the IRS might actually find major problems with your report. If so, the agency will likely want to meet you at a local office or even your own home. At this point, you’ll want the help of a tax professional.

But you don’t have to get to this point. There are a number of steps you can take that will greatly reduce your odds of suffering through an IRS audit.

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Article printed from InvestorPlace Media,

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