Bay Area Estate And Tax Planning Law Firm

Tax return items that can trigger an IRS audit

On Behalf of | Jun 14, 2013 | Uncategorized |

Many California residents are curious about which types of tax matters are most likely to garner the attention of the Internal Revenue Service. In truth, it is impossible to predict with complete accuracy which returns will lead to an audit. However, there are a number of tax return issues which are known to increase the likelihood that the IRS will want to take a closer look at one’s tax return.

One such issue involves the volume of itemized deductions claimed on one’s return. When a return contains a sizable number of deductions that surpass IRS target levels, it may be flagged for closer examination. The same goes for returns in which large volumes of business or investment expenses are claimed.

Another factor that could increase the likelihood of an audit is when an individual claims significant charitable donations. When the value of such donations is out of proportion to an individual’s income, the IRS may wish to learn more about the circumstances surrounding the donation. One example of a situation that can lead to this type of issue is when a taxpayer inherits a large volume of personal belongings upon a loved one’s death, and chooses to donate the items to charity.

Unfortunately, California taxpayers can encounter financial scenarios that will trigger an IRS audit, even when there is no wrongdoing on the part of the filer. An audit can be stressful, and for consumers who are unaware of tax law and the process of defending one’s return, the outcome can bring financial harm. In such cases, having the expertise and advice of an attorney can ease the process and improve the outcome of a tax audit.

Source: Standard-Examiner, “Avoid certain areas that may trigger an IRS audit,” Tracy Bunner, June 11, 2013

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