| For most Americans, the mere suggestion of an IRS | | | | deductions, your possibility of an IRS audit go up |
| audit is enough to require the changing of the pants. | | | | massively. The software will compare your deduction |
| So, what percent chance do you have of an IRS | | | | with others in your income group and will find that it is |
| audit? | | | | rare that anyone in that income range ever makes |
| Relax; the percentages of IRS picking you for audit | | | | such donations. A red flag will be assigned to your file |
| are very small if you have filed your taxes honestly | | | | and it is audit time. If you actually have $10,000 in |
| and properly. The IRS gets a couple hundred million tax | | | | charitable deductions, however, this should not stop |
| returns filed every year. It does not have the | | | | you from claiming them. You need to simply make |
| necessary staff to audit each and every tax return. In | | | | sure that you have all the necessary documents to |
| fact, the IRS audits less than 2 percent of tax filers. So | | | | support your claim of making a donation in that amount. |
| theoretically, the possibility of you getting audited by the | | | | More than employees, self-employed people are |
| IRS is very low unless you attract their attention by | | | | targets of audits as they have the ability to convert |
| committing a few mistakes. | | | | personal expenses in to business ones and put it under |
| One area where you can hurt your possibility of an | | | | itemized deductions. Your car mileage and expenses |
| IRS audit is underreporting income. For zeroing in on | | | | on meals and entertainment must have detailed |
| possible undisclosed taxable income, the IRS has | | | | information backup. The use of a car or truck should |
| devised certain criteria. The IRS has computer | | | | have detailed logs and invoices of maintenance. Meals |
| software that separates the suspect filers from the | | | | above $75 should have bills and for amounts below |
| clean ones. It also filters out filers who have claimed an | | | | that, a simple entry in the diary with details of date, |
| excess of deductions, have shown losses for | | | | place and name of restaurant and kind of |
| successive years and show expenses | | | | entertainment they provide, person entertained and |
| disproportionate to the size of their business. | | | | your relationship to them will suffice. |
| If you earn $50,000 and show $10,000 as charitable | | | | |