|by Eric Lasch, Senior Tax Manager
Taxpayers and tax professionals alike find very little enjoyment in enduring an IRS income tax audit. While only 1% of taxpayers are actually audited each year, there’s no good reason to be included in that statistic. Therefore, it’s important to be aware of the red flags that give rise to receiving an IRS letter in your mailbox.
What exactly is an audit red flag? Most tax returns are processed by IRS computers. The computers are programmed to look out for unreported income and certain deductions and credits that stray too far from statistical norms. Audit flags don’t mean you will be audited, but they do mean that the IRS will probably take a closer look at your return.
So here are 12 of the more common audit red flags: (more…)