How can you avoid a tax audit?

On Behalf of | Mar 12, 2021 | Tax Law

The phrase “tax audit” tends to strike fear into the hearts of people in Arkansas. Audits are rare, but they could happen if the IRS is suspicious of your income, charitable gifts or tax deductions. Being 100% honest on your taxes is always the best way to avoid an audit.

What are some other ways to avoid a tax audit?

Tax law allows people to file their taxes electronically or through the mail. Most people file their taxes online, but if you choose to use paper documents, you’ll have a higher risk of making mistakes. In fact, over 20% of mail-in tax documents have errors every year. Online software can walk you through the process and do many of the calculations for you.

You should also limit the number of deductions that you take. Whenever you take a deduction, you might want to have paperwork on hand that proves that you qualify. Otherwise, the IRS might audit your taxes and claim that you took deductions that you didn’t actually earn. A tax law attorney could help you if the IRS has an issue with your taxes.

Finally, it’s important to double-check your figures. A typo or an honest mistake could lead to a major error on your taxes. Keep track of your income and expenses throughout the year so you won’t have to scramble to find your paperwork during tax season.

What should you do if the IRS calls?

You don’t have to face an audit alone. If you’re dealing with legal challenges from the IRS, an attorney might help you defend yourself while cooperating with the IRS. They could also help you file your tax returns from the beginning and answer any questions that you might have. Working with an attorney may prevent a visit from the IRS later on.