Our recent series of articles, on how an IRS audit of your Federal tax return is triggered, has now been completed. You may now peruse all three installments for a complete view of the audit risks you may be unaware of, the best practices to comply with IRS regulations, and methods to document your finances properly and prevent the IRS from casting undue suspicion on your tax return.
Part 1: Audit Rules
In our opening installment, we reviewed the IRS audit process from a broad viewpoint, introducing the general principles that the agency uses to examine tax returns.
Part 2: Income & Credit Triggers
In the second part, we covered the factors which can lead to an audit based on the income you report and credits you claim. This includes such pitfalls as commonly misunderstood credits, expenses which tax filers often mistakenly believe they are allowed to write off, and so on.
Part 3: Deduction Triggers
In the final segment, we explained how deductions can make the IRS suspicious. The key details here are the ways you can accurately document your deductions, and the types of deductions which the IRS examines most closely (and which therefore must be documented most reliably).
