Have you ever wondered why some returns are audited and others are not?

The IRS doesn’t have enough personnel or resources to examine every tax return, so they rely on a variety of systems to target the returns that will generate the most revenue per hour for an auditor’s time.

Does your W-2, 1099, and other documents that are sent to the IRS match what is on your return? The best way to solve this is to be sure you get all these documents to us. Every year we see audits because we were not given all tax documents. You may have forgotten you worked for X for a week at the beginning of the year. It does not matter if you only worked a day. The income must be included on your return.

Low income for self-employed persons may trigger an audit. If the IRS believes there is no way you could live on the income you are showing. For example, you reported $30,000 of income for your business. IRS believes that based on your occupation, deductions, zip code, and family size, they determined you need at least $49,000 to pay your bills. Therefore, the IRS believes you have unreported income. You will now be forced to battle with the IRS because they believe your are lying.

Another trigger is out of balance expenses. If other businesses are paying $5,000 a year for renting an office and you show $12,000 the IRS will question your numbers.

If you do your own taxes, you may be audited more then someone that uses a tax professional. Who ever does your taxes make sure you e-file your taxes. This will lower the possibility of an audit.