Taxes are a certainty of life. No matter how one feels about having to pay taxes each year, it is unavoidable. If a person experiences a tax audit, it can be a stressful event. Fortunately, there are some measures that Minnesota families can take to minimize their chance that they will be audited and there are ways to manage an audit if it does occur.
One of the easiest ways to avoid being audited is to file one’s taxes through IRS-approved computer software. These programs will search for red flags and help a taxpayer claim deductions. Another way is to watch for common audit triggers. If a taxpayer has a large deduction, he or she will need to ensure that receipts, checks and other related financial records are included with the tax return. If one has a side job that generates income, it may make sense to avoid filing with a Schedule C and simply list the income on their tax return on line 22.
If a taxpayer is audited, proof must be provided that the filer was allowed to claim certain deductions, credits or exemptions. A taxpayer shouldn’t fear taking the time to gather relevant documents, though negotiations with the IRS may be necessary if it is determined that additional taxes and/or penalties are due. Providing the auditor with only what information is requested and attempting to have the audit done at an IRS office may also help the situation. A taxpayer has the right to have the auditor answer questions, and it is even possible to file an appeal.
Additionally, those who are audited may find it helpful to research applicable tax laws and seek assistance with these potentially confusing subjects. More information is available on the subject of a [url=‘http://tax.findlaw.com/tax-problems-audits/what-to-do-if-the-irs-audits-you.html’]tax audit[/url] that can help Minnesota taxpayers who find themselves in this situation. An audit appeal may be necessary, and a taxpayer will need to be ready for such a possibility.
Source: FindLaw, “What to Do if the IRS Audits You“, , Aug. 30, 2014