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IRS Audit: What to Watch Out For; The Self-Employed Are in the Bullseye  by: Howard Schwartz Tax-Definition.org ( http://www.tax-definition.org ) is announcing the following IRS Audit Tips- Tax Tips for IRS Audits: http://www.tax-definition.org/irs-audit/ According to latest reports, the Internal Revenue Service, or IRS, is increasing the total number of income tax returns selected for audit. But it isn’t as bad as it sounds, because the audit rate has actually gone down. On an average, the IRS audits around 1 percent Americans every year. That minimizes your chances for receiving an audit notice from the IRS, but doesn’t completely rule it out. On your part, you need to ensure that your tax return doesn’t attract unwarranted importance. This becomes more important if you’ve made some manipulations in your returns. Your objective should be to show your returns to be as normal as possible so that they mix in with the innumerable other returns. Still, many Americans do make the mistake of showing huge deductions or losses in their returns, which makes IRS audits inevitable. If you, too, have filed an income tax return that gets selected for IRS audit, then there are a few things that you need to remember. IRS audits are specifically targeted on those returns where the expected payoff amount is greatest. The self-employed are usually targeted the most; if you happen to be one, be ready to backup your business expenses. Even while filing the returns, if you’ve claimed a deduction that’s higher than average, it’s better to attach supporting documents along with the return. This won’t only prove to the IRS that your deduction is genuine, it will also discourage further IRS audits. Whatever the primary focus of the audit might be, during the audit the IRS auditor gives maximum importance to the entertainment, meal, and auto deduction records. In order to ensure that your IRS audit goes well, you can follow these tips: - During an audit, you need to show documents to prove any of your credit, deduction, or exemption claims that the IRS is questioning. - You are well within your rights to ask for more time for the audit, that is, postpone the date of the audit in order to get your papers in order. - Don’t provide any more information than what is asked for. - Try not to have the audit at your home or office. Go to the IRS office with all the documents, or you can even have your tax professional represent you. - It’s always better to consult a tax professional as soon as you’re notified about the audit. Even while the audit is in progress, you can always ask for a break to consult your tax professional. You can claim deduction for the fee you pay to a tax professional for audit representation. - If during the audit, you feel that the auditor is not treating you properly, you’ve every right to ask for the auditor’s manager. - If you don’t agree with the outcome of the audit, you can appeal. - Chances are, you’ll have to end up paying some amount, so be prepared. It is in the best of your interest to consult a tax professional for the audit. And even if you feel that you can handle the audit on your own, do inform your tax professional to get a briefing about the audit, as well as to have the required documents in order. Tax Tips for IRS Audits: http://www.tax-definition.org/irs-audit/ About The Author Howard Schwartz is a partner in several business strategy groups, including HJ Ventures International, Inc. Howard has worked with hundreds of entrepreneurs worldwide with a focus on writing Business Plans for companies interested in raising capital from Venture Funds and Angel Investors. Howard’s business plans have secured several million dollars in funding. For more information: http://www.tax-definition.org. investorplanner@yahoo.com This article was posted on February 23, 2006   View More Videos from the "Business and Finance" category: How NY Fashion Designers Will Benefit From the Crisis Small Business Stories - SunPro Understanding FERPA CISCO's Green Business Solutions   Read More Articles from the "Business and Finance" Category: Why So Many People Fail In Affiliate Marketing by Clarence Binayu Leverage Balance Transfers by Jeff Lakie The Importance Of Networking In Recruitment And Job Hunting by Andrea Watkins Commercial Real Estate Addition to Tyson’s Corner by Steve Jonas Using Credit Cards by Rudy Hadisentosa A Guide to Buying a Property in the Dominican Republic by Les Calvert The SOUP Model by Dr. Alvin Chan Don';t Attempt International Business Without A Translation Service by Nick Messe Building Your Team by Hugh Ballou How to Buy Notes - Note Buying, Knowing your Enemies by Dean Engle << Back to "Business And Finance" Index

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