Facing an IRS tax audit is a scary experience for anyone. Yet, every year, thousands of people face this dilemma. There are many reasons why the IRS may audit you. Believe it or not, however, an audit isn’t as scary as many people believe it to be, so long as you’ve been telling the truth. The audit is simply checking your numbers to make sure that there are no discrepancies in the return that you filed for the year or for prior years. If you cheated the system, there is reason to worry when there is an audit. You can learn below some of the reasons why the IRS may decide to audit you. Then, you can read more about tax debt relief options that might help you out of this sticky situation quickly and easily.
1- Mathematical Errors
One of the most common reasons end of it occurs is because of mathematical errors. It is important that you complete your tax return correctly, especially if you owe money. Don’t get distracted as you are doing your taxes and write wrong numbers, fail to write in final zeros, etc. While mistakes happen, it is important that you double or triple check your work to ensure that it is corrected so you can avoid audits.
2- Failure to Report Income
If Uncle Sam thinks that you have earned money that you’ve not reported, you can very well expect an audit. There are many ways for failure to report income. All of them are just as bad as the next and can result in an audit quickly, whether you are earning wages online or elsewhere. Make sure that any and all money you earn is reported on your taxes to keep yourself out of hot water.
3- Charitable Donations
If you are a generous person who donates to charities, you can file this on your taxes and receive a break on the money that you owe Uncle Sam. However, if you are filing many charitable donation claims on your tax returns, the IRS may actually look into the contributions you were making and want further proof that they are actually being made. So, as long as you are making only truthful claims, there is no reason to worry if this is the cause of your audit.
4- Too many losses
Reporting too many type of losses on a schedule C tax form is in another reason that you may receive an audit from the IRS. If you have lost personal expenses and you want to write them off on your taxes, be sure that you back the claims up and have receipts. The IRS may wonder how your business is staying afloat if there are too many losses that you were reporting.
These are some of the common reasons for an IRS tax audit to occur. Remember to read more about tax debt relief options if you have an IRS audit coming your way to learn if it is something that can help you. For many, these tax debt relief options are wonderful and provide just what they need.