Dorothy |Philbin

The Internal Revenue Service has announced the triggers which will mark a taxpayer for audit.  Here they are:

1.  Those who itemize their deductions rather than taking the standard deduction.  Sometimes you don’t have a choice but don’t get carried away.  Keep it reasonable.

2.  Millionaires – there is so much there to audit but millionaires usually have very good accountants and lawyers.  My personal opinion is that millionaires are on the list just to make the rest of us feel better.

3.  Income does not match lifestyle – This usually applies to people who work in cash-oriented industries.  Hairdressers/barbers (especially those who work out of their homes,) food servers and bartenders all have a better chance of audit.  If the IRS sees someone living in Haddonfield, has a mortgage, and luxury cars but makes only minimum wage – expect an audit.

4.  No or negative net income (adjusted gross income) – let’s be real.  How could you have so many expenses or business losses that you have no money to live on?

5.  Earned Income Credit – this is an oldie but goodie.  It is an easy audit and the assignment is usually given to seasonal employees who has little training.  Most likely a letter will be sent and no personal trip to the IRS is necessary.

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