Personal Tax Return Audit – How We Are Selected
Audits are selected mostly by the matching system, now that the IRS computers have been updated. It’s very easy to match W-2′s, 1099′s, K-1′s, and other 3rd party payer documents to what you included on your return. There is also a DIF score, and compliance audits.
Returns may be selected if they include the following:
- Income that it looks like there should have been withholding tax taken out, or self employment tax paid.
- Too many credits or exemptions, etc. based on your situation.
- Incorrect social security numbers that don’t match dependents.
- Sales of car, house, etc. that should have been reported.
- Transactions that involve complex reporting and the income is large.
For more information see how to avoid a personal tax return audit by audit proofing your income tax return. The best way to reduce the possibility of the IRS auditing your return is to do the following:
- Make sure you include on the return, all information on documents that were sent to the IRS by 3rd parties. W-2′s, 1099′s, K-1′s, etc.
- Make sure you put everything on the correct lines of the correct forms. Also totals are correct and carry over to the right places on the forms.
- Any items that stand out should be explained on a separate attached schedule.
- Look at the return as a whole and see if it makes sense for you to have that much in deductions based on your level of income.
For additional information see IRS Audit.
- If you are considering hiring us, call Joe Mastriano, CPA 713-774-4467.
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