When it comes to collecting taxes the Internal Revenue Service doesn’t play around. Every year, countless people are audited because of the information they provide on their taxes. The audit process can be very intrusive and invading. Let’s take a look at some of the most common red flags that cause the IRS to start an audit.
One of the biggest things you can do that’ll trigger an audit is not reporting your entire income. With some people this is an honest mistake, but with others it’s intentional. Some people receive income from a variety of sources and have a difficult time keeping up with all of it. The sources you receive income from are required to report your earnings to the IRS in Galt, CA. If you deliberately attempt to not include income, in order to avoid paying more tax, you’re committing fraud and stand a better chance of being audited sometime in the future.
Do you have an overseas account? Many Americans conduct international business and often have assets stored in accounts in foreign countries. Years ago, those with foreign accounts were only required to reveal whether or not they held an account overseas. Now, the IRS has started requiring account holders to disclose the institution they’re using and the highest dollar amount it contained a year ago. They’re also requiring institutions to provide the identity of American account holders and miscellaneous account information. The IRS in Galt, CA is becoming more strict because those who have assets stored in foreign accounts are looked at as people who are attempting to hide money. Disclose this information to avoid trouble down the line.
The IRS is also looks at your business expenses very carefully. Tax laws allow filers to claim certain expenses as business expenses, and this allows them to receive deductions. However, some people attempt to blur the lines when it comes to this, and will attempt to claim certain expenses that are somewhat ambiguous. Because of this, the IRS has begun looking closely at those whose claims look suspicious. You should only claim expenses that are strictly related to business. Suspicious and excessive claims will likely attract an audit. Work with Symons Accountancy to make sure that all expenses are legitimate and accounted for.
