~ It’s BACK- The IRS Revives The Random Audit Program!!~

 

The IRS is bringing back its formerly reviled random audit program this fall. A projected 13,000 taxpayers stand to have their income tax returns closely examined, line-by-line. “Time consuming,” “excessively burdensome,” and “very expensive” are some of the adjectives used to describe the process taxpayers and their advisors go through if selected for an audit. It seems as though this is just the beginning of what will become an ongoing reality of escalating detailed tax return audits by the IRS. As such, the likelihood of a taxpayer being audited will rise in the years to come

 

The two reasons the IRS has revived this program are to first, collect data to make future enforcement of the tax laws more effective and efficient and, second to narrow the widening tax gap, or the difference between taxes actually owed and taxes actually collected. Taxpayer non-compliance, fraud, and errors can be costly-additional taxes, interest, penalties, and possible criminal charges.

 

So, what are some simple ways you can audit-proof your tax return should the IRS select you for an audit.

·         Check every line on your return for errors and mistakes, especially math and spelling errors

·         Be sure all names and social security numbers on the return match and are correct

·         Make certain all sources of income are reported on the correct lines of your tax return

·         Include all required tax forms, schedules, worksheets, and attachments to your filed return

·         Save written documentation for every deductible expense and every tax credit taken

·         Don’t forget to sign and date your return, both spouses if filing a joint tax return.

·         Remember to mail your return, if a paper return is filed, to the correct IRS address.

·         Pay all expenses by check or money order in order to have written proof of payment

·         Save all financial records and statements used to prepare your return

·         Set up a bookkeeping system that provides documentation for every item on your tax return

 

With a little advance planning and organization, you will feel confident and have peace of mind knowing that your tax return is free of any errors, omissions, and mistakes-that you have a tax return that is virtually audit-proof should the IRS ever come calling.

 

Editors Note: Donald Scherzi is a Certified Public Account and a Certified Financial Planner. If you would like a Free Copy of Donald’s Personal Family Budget Template call him at 746-1926 or email him at donaldcpa@bellsouth.net.  He has been a Heights resident since 1996. You may visit his web site at www.donaldscherzicpa.com for tips, strategies, and news to improve your total financial well-being.