- 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 »

Timing Your Spending

How to pay less by changing when you purchase.

View Course »

TurboTax Articles

Amending Your Income Tax Return

What if you've sent in your income tax return for a previous year and then discover you made a mistake? You can make things right by filing an amended tax return. And, don't think an amended return will automatically cost you money; it's perfectly okay to change a return to capture a tax break you missed the first time around.

How to File Taxes with IRS Form 1099-MISC

If you receive tax form 1099-MISC for services you provide to a client as an independent contractor and the annual payments you receive total $400 or more, you'll need to file your taxes a little differently than a taxpayer who only receives regular employment income reported on a W-2.

What If I Did Not File My State Taxes?

At the time of this writing, the only states that do not charge a state income tax are Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. If you live or earn money in one of the other 41 states or the District of Columbia, you may need to file a state income tax return by April 15. It is a separate and independent requirement from filing your federal tax return and failure to file it on time may result in interest and penalty charges.

Add a Comment

*0 / 3000 Character Maximum

1 Comment

Filter by:
scottee

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
clarita995

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