Berkshire Tax Resolution: How to Avoid an Audit According to Berkshire Tax Resolution

May 17, 2010 - PRLog -- Berkshire Tax Resolution: How to Avoid an Audit According to Berkshire Tax Resolution

Berkshire Tax Resolution knows that one of taxpayers’ biggest fears is being audited by the IRS (Internal Revenue Service). Even if you are definitely sure that you’ve filed your taxes correctly, you will still tend to wonder when you’re going to receive a phone call or letter from an IRS representative. Berkshire Tax Resolution wants you to know that you can worry a little less this tax season. Here are some ways Berkshire Tax Resolution believes you can avoid a tax audit.

1. Certain types of taxpayers are more likely to be audited than others. Berkshire Tax Resolution has learned that these include taxpayers who make more than $200,000, self-employed taxpayers and small business owners, and taxpayers who could be hiding taxable income overseas.

2. One of the biggest triggers for a tax audit, Berkshire Tax Resolution points out, is having high deductions compared to other taxpayers within your same tax bracket. By attaching a receipt or other documentation to your tax return, you can account for high deductions. While above average deductions can indeed trigger an audit, being proactive and providing proof will reduce your chances of being audited. Berkshire Tax Resolution recommends you don’t be afraid to deduct expenses that are legally deductible. Instead, make sure you can justify the amount of your deduction. So, try to write checks whenever possible and keep a copy of the cancelled check in your records.

3. Berkshire Tax Resolution suggests you double check your math. Common reasons for tax audits are typically a result of addition and subtraction errors. Not to mention, they’re easy to fix and avoid. Check and double check your numbers to make sure you’ve included the right ones.

4. Use tax preparation software. Tax prep software such as TurboTax or H&R Block eliminates math errors that can lead to an audit. Berkshire Tax Resolution explains that they can also do an analysis of your tax return to let you know any items that could trigger an audit. Be aware that even tax software can’t completely eliminate your chances at being audited since the IRS computers audit number random taxpayers every year.

5. Berkshire Tax Resolution recommends you make sure to report income and interest from any 1099s you receive. The IRS software does a check to make sure the income reports on the 1099s it received for your social security number matches what you reported. Berkshire Tax Resolution wants you to keep in mind that discrepancies could trigger an audit. If you believe the amount on your 1099 is an error, contact the issuer to have it corrected. You should contact the IRS by calling 1-800-829-1040 for assistance, if that is unsuccessful.

6. Use a reputable tax preparer, such as Berkshire Tax Resolution. Your tax preparer should be experienced with filing the type of return you need. Be wary of choosing tax preparers with high audit rates. Berkshire Tax Resolution recommends you ask that your tax preparer not make assumptions or conclusions about your records. Instead, request the preparer call you with any questions.

7. File at the last minute. It may seem like you should be the first to file your taxes, but the IRS receives numerous returns on April 15 and can’t scrutinize them the same way returns filed on February 1 may be. That’s not to say you can avoid an audit all together by filing later. Berkshire Tax Resolution recognizes you just reduce the risk.

8. Report all sources of income including child support, alimony, and cash receipts. Berkshire Tax Resolution goes on to explain that child support and alimony received will be tied to your social security number, so the IRS will already know about it. Though you might think getting paid under the table will keep you from paying taxes, the IRS can find out about cash receipts. For example, if you deposit cash into your checking account, an audit will raise the question of where the deposits came from.

9. File your income taxes. You’re legally required to do so, no matter what you think or feel about paying taxes. Avoiding paying taxes is a crime and if you’re caught, you’ll face criminal charges and monetary
penalties. On top of that, you’ll have to repay the taxes you should have paid during the time you avoided paying taxes. Berkshire Tax Resolution believes that a good example of this was the singer Willie Nelson, who in 1993 had to pay $16 million to the IRS for evading taxes.

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Berkshire Tax Resolution would like you to be aware of the fact that the IRS has several ways to figure out which taxpayers have not filed their taxes. The IRS now teams up with certain states in what is called the Abusive Tax Avoidance Transactions, meaning the IRS is in partnership with states to combat tax avoidance. Berkshire Tax Resolution is here to settle any accounting, or tax, issues that may be facing you and/or your business.