These helpful tips will help you avoid this experience altogether.
Give Them All the Details Up Front
Some things just beg for an audit. If you never list doctor bills before, but this year you had a surgery or some other significant expense, you can decrease your chance of an audit if you include a copy of the bill with your return. Did you make a large charitable donation? Include a copy of the check and other paperwork explaining the deduction. In short, if you have anything that you think may look “interesting” to the IRS, include an explanation along with the proper documentation to help avoid an audit.
Be One of the Crowd
Most people work for someone else. Get paid by check and have taxes automatically withheld. Most people do not have offshore investments, home offices, foreign credit cards, get paid in cash, etc. If any of these situations apply to you, then be prepared for an audit. Make sure that, if you are not most people, you have good paper records to prove every line entered on your tax return. (In fact, you may consider including copies of this paperwork with your return!)
Do the Math, then, Do the Math Again
A mathematical error will not automatically result in an audit. The IRS uses computers that can fix most errors automatically and just spit out a letter to you telling you where you screwed up. However, if your return has several of these errors it indicates a rush job, or a lack of attention to detail. This may lead to an audit since the IRS figures that, if you do not pay attention to the math, they will have a good chance of finding other mistakes.
Wait Until the Last Minute
Now, for most things in life, this is bad advice. But, if you want to decrease your chance for an audit, be one of those people standing in line at the post office on the evening of April 15th. The IRS has to select a certain number of returns for audit each year. They do not wait until the last minute. If you do, you lower your chances of an audit.
If you do get that nasty letter from the IRS then do yourself a favor and pay a tax attorney to represent you. Do this up front before you meet with or even call the IRS.
