IRS audit
 
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Ways to reduce the chances of IRS audits (continues...)

File late tax return

Filing late tax return with an extension is believed to reduce IRS audit chances because there is a limited number of tax returns the IRS can audit. Many of these tax returns will already have been selected before a late tax return is actually filed. If a tax payer gets a tax filing extension, it is only an extension of the time a tax payer has to file the tax returns not the time tax payer has to pay taxes owed to the IRS.

The tax payer must pay at least 90% of the taxes due by April 15 to avoid tax penalties of late tax return.

File legible tax returns that are neat and organized

Nowadays there are many cheap tax filing software such as Turbo tax and Tax Cut and many software online. Don't file a tax return that the IRS has trouble reading or understanding. If the IRS is forced to examine a tax return more closely because it cannot read some of the information on the tax return, the chances of an IRS audit increase tremendously. This is unnecessary risk of an IRS audit.

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