- Days left

IRS Audit Triggers: Six Red Flags

Audit letter from IRS
Cassandra Hubbart, DailyFinance
By Joy Taylor

Ever wonder why some tax returns are scrutinized by the Internal Revenue Service while most are ignored? The IRS audits only slightly more than 1 percent of all individual tax returns annually. The agency doesn't have enough personnel and resources to examine each and every tax return filed during a year. And its resources are shrinking ... the number of enforcement staff dropped nearly 6 percent last year, partly due to budget cuts. So the odds are pretty low that your return will be picked for review. And, of course, the only reason filers should worry about an audit is if they are fudging on their taxes.

Here are six red flags that could increase your chances of drawing some unwanted attention:

More from Kiplinger:

Increase your money and finance knowledge from home

Economics 101

Intro to economics. But fun.

View Course »

Managing your Portfolio

Keeping your portfolio and financial life fit!

View Course »

TurboTax Articles

Video: Tax Guidelines About Gifting

Note: Some of the content of this video applies only to taxes prepared prior to 2012. It is included here for reference only. Find out the tax guidelines about gifting with help from TurboTax in this video on tax tips.

Video: What are Income Tax Rates?

Note: The content of this video applies only to taxes prepared for 2010. It is included here for reference only. Income tax rates change depending on both the amount of money you make and how you made it. Find out about income tax rates with help from TurboTax in this video on tax tips.

Video: How To Reduce Errors on Your Tax Return

Did you know that errors on your tax return can affect the amount of your tax bill and the amount of time it takes to get a refund? Fortunately, TurboTax helps you avoid errors AND be sure you're getting all the tax deductions and credits you deserve.

Does Your Company Need to File Form 1095-B?

A company is responsible for filing IRS Form 1095-B only if two conditions apply: It offers health coverage to its employees, and it is "self-insured." This means that the company itself pays its employees' medical bills, rather than an insurance company. A company that doesn't meet both conditions won't have to deal with Form 1095-B. Its employees might still receive a 1095-B, but from their insurer, not the employer.

Video: Who Qualifies for an Affordable Care Act Exemption (Obamacare)?

The Affordable Care Act requires all Americans to have health insurance or pay a tax penalty. But, who qualifies for an Affordable Care Act exemption? Find out more about who qualifies for an exemption from the Affordable Care Act tax penalty, how to claim an exemption on your tax return and how the Affordable Care Act may affect your taxes with this video from TurboTax.

Add a Comment

*0 / 3000 Character Maximum

1 Comment

Filter by:

if we had a small national sales tax that everyone pays...instead of the 73,000 pages of current tax code, we wouldn't need the IRS and all the tax games that people play.

March 19 2013 at 10:49 AM Report abuse +1 rate up rate down Reply
1 reply to scottee's comment

but what about the states that have been and still ARE doing fine without any sales tax ? this is why it won't float.....and be realistic ONCE THEY START their taxes you know it always increases-

March 28 2013 at 11:16 AM Report abuse rate up rate down Reply