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Smart Tax Moves

Tips for avoiding the harsh gaze of the IRS
June 1, 2006
URL: http://www.entrepreneur.com/article/160266

Beware: The rate of audits by the IRS rose 20 percent in 2005. Fortunately, three steps can help minimize your chances of hearing from the IRS's enforcement division, says Steven T. Merkel, vice president of portfolio management at Naples, Florida-based Financial Advisory Consultants.

Those who are self-employed or work in fields where fees are often paid in cash are more likely to be audited. "Keep great records, especially for things like meals and travel expenses, mileage deductions, and charitable contributions," says Merkel. "Be able to substantiate everything you've claimed."

Jennifer Pellet is a New York City freelance writer specializing in business and finance.