Tips for avoiding and surviving a tax audit
The IRS audits only a small percentage of tax returns. But if your business is one of the lucky few, understanding the appropriate steps to take will determine whether or not your outcome is favorable. First, it is essential to understand how a tax return is selected for audit. There are many reasons a tax return could be chosen for an audit, including the following.Disagree with the IRS? Appeal its Decision
There are as many tax issues as there are taxpayers. Everyone's situation is unique. But taxpayers who find themselves disagreeing with the Internal Revenue Service share a common bond. Each has the right to appeal the agency's findings.
How to Prepare for an Audit
As anyone who's gone through an audit can attest, the three top tips for preparing for the experience are good records, good records and more good records. In other words, adequate record keeping year round, not just on April 15, is essential in case of an audit. More specifically, how should you, a taxpayer, prepare for an audit if it happens? These tips will point you in the right direction.Red Flags that Tempt the Tax Auditor
The IRS says there are several ways a return can be selected for audit and the first is via the agency's computer-scoring system known as Discriminant Information Function, or DIF. The IRS evaluates tax returns based on IRS formulas, and DIF is based on deductions, credits and exemptions with norms for taxpayers in each of the income brackets.
5 Questions to Ask Your Tax Attorney
Do you need a tax attorney? In order to choose the right professional to help you with your situation, it's important to determine if he or she is qualified. Here are five questions to ask to find the right one for your situation.
What the IRS Doesn't Want You to Know
If the IRS comes knocking, a little knowledge can keep you out of the taxpayer penalty box. A former IRS Agent explains how understanding the ins and outs of the IRS can help you win if you face an audit.
More Money Tips & Tools
- 10 places to look for $500 in savings
- 9 savvy strategies to save for a rainy-day fund
- 5 big bills you can cut fast
- Money-saving secrets of the rich and frugal
- It's NOT the $4 cup of coffee keeping you broke
- How to get your side-hustle going with crowdfunding
- A variable income budgeting strategy for the seasonal worker
- This week's Readers' Tips