Avoid IRS audits
The IRS will try to perform as many IRS
audits each year as the IRS has resources for. The IRS
believes that the more IRS tax audits the IRS
conducts the more tax money the IRS will collect. The more
money the IRS collects from tax audits the more IRS can
get budget next year from Congress.
With the bigger IRS tax budget, the IRS can
hire more IRS tax auditors and tax collection agents, collect
more IRS tax money , increase the IRS budget again
and so on. The IRS fears Congress because Congress can take
away the IRS funds. Reducing IRS budget means
reducing IRS power and money.
While there is no way to totally eliminate
the risk of IRS audits. A tax payer can greatly reduce the
risk of an IRS audit by the followings methods. Since
some IRS audits are random so here are some things to do to not
red flag the IRS.
Ways to reduce the chances of IRS
Tax payers should report all income that the IRS knows
about or can find out about
Using the IRS computer system, the IRS has a
tremendous ability to match income from sources the IRS knows
about. Examples of sources that the IRS knows about are
employers, banks, mutual funds, businesses, stock and real
estate brokers. The IRS is almost always sure to catch any tax
payers who fail to report income from these sources.
Unreported income is the number one target
in almost all IRS audits and is the one area where tax payers
should be most careful. The IRS can also match k-1
information from certain corporations, LLC, trusts, and
partnerships to tax payers' personal tax return