Five Tips For Avoiding a Tax Audit Before you file your taxes, watch out for these common red flags that could draw unwanted attention by the IRS.
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Taxes are a necessary evil--the price we pay for roads, bridges, schools and law enforcement. Audits, on the other hand, feel just plain evil.
In an effort to thwart fraud, the Internal Revenue Service audits about 1 percent of U.S. taxpayers every year. IRS computers are programmed to catch outliers and oddities on returns; any item that falls outside the norm may be flagged so that an IRS employee can review it to see if there's actually a need for an audit. Common red flags include:
Incomplete or sloppy returns. Math errors and missing information make the IRS cranky. If the agency's computers can't make sense of what you filed, your return will be rejected. Eyebrows will be raised if the numbers on your state return don't match those on your federal return.