The dreaded IRS audit season is swiftly approaching and many of us cringe at the thought of scrutiny from the Federal Government’s number one watchdog entity. While many of us are compiling information to send to our Tax pros for review and filing, there are some important IRS audit triggers to keep in mind. With the new budget plan in place as of January 13th, the IRS will be looking to the taxpayer to make up the $1.7 billion it lost in Federal funding this year.
5 Ways to Encourage an IRS Audit
- Significantly increase profits: Unfortunately, the “wealthy squads” have been deployed by the IRS to scrutinize those who are considered wealthy in the U.S. If you had a significant salary increase last year or your business did exceptionally well, you may be targeted for audit.
- Open offshore accounts: It is not illegal to maintain an offshore account; however, it is illegal to attempt to hide or not declare the account.
- Refuse to pay in protest: Though you may feel it is your duty to protest income tax laws, the IRS has a knack for taking a closer look at the financial information belonging to “tax activists.”
- Claim exorbinant charitable contributions: ‘Tis the season for giving, but not too much. The IRS takes falsified or large charitable contributions seriously. If they feel you have claimed these unlawfully, be on the lookout for an audit this year.
- Report income, just not all of it: This is the most common IRS audit trigger. Since you are likely not the only one reporting your income, you can be caught by the IRS for not reporting all you made. Subcontractors can easily be caught in this trap should the hiring contractor report the amount paid your firm, but you did not.
Keep your firm safe from audit, let the professionals with Roberts Tax Advisory handle your firm’s financial information. Contact us today for a consultation.