How to Avoid an IRS Income Tax Audit

One rule for all matters to do with the IRS is to be honest at all times and have proof. Anything that is not in line with the average will likely stick out and get you in trouble. If you  are audited and you were being honest, then in most cases you have nothing to worry about, but even so, you will want to avoid it, if possible.

• Avoid round numbers. Rounding off can be a sign that you are not being entirely truthful.


• Keep your returns neat and complete. If the papers are sloppy, the IRS may take it as a sign that the mathematics are sloppy too.


• Report all income. Remember, the IRS is getting paperwork from everywhere that pays you. Underreporting income or appearing to underreport income is one of the best ways to invite an audit.


• File on time. If you are uncertain of the amount that is due, pay a token sum. Not meeting deadlines for filing can raise red flags.


• Respond to the IRS. If the IRS sends you a letter, do not ignore it. Always keep very precise records of all your conversations with them, whether by letter or by phone.


• Conduct some research on the people preparing your taxes to see if there are any complaints or issues with them. 


• Document all expenses. Have proof to show the IRS how those expenses relate to your business. You want to be as transparent as possible.


• Get a professional to help file your taxes. These people's job is to help you not get audited by the IRS.


• Ensure that there is no incorrect or missing information. Much like the neatness issue above, missing information may make you appear to be doing something fishy even when you are not. An example of missing information is your signature. It may seem obvious, but sometimes people forget.