• Mike V.

Meaningful Ways To Avoid Audit From IRS

Of the 148 million individual tax returns filed in 2016, 1 million (about 0.7%) were audited, according to IRS.


Here are some things that could cause the IRS to audit your tax return:


1. Large charitable donations

If your charitable deduction is high relative to your income or in comparison to your income peers, it could trigger interest from the agency. That's definitely a red flag.


2. Rental activity

Be aware that the IRS is on the lookout for abuse. That already was a higher area of audit and it might be higher now. While it's not uncommon for rental activity to generate a loss repeated losses also can be a red flag. If your rental puts up losses year after year, that's a red flag to the IRS.


3. Unreported income

If you fail to report any earnings, you'll hear from the IRS. The No. 1 thing that causes you to get a letter from the IRS is failing to report all your income.


4. Overseas accounts

Keep in mind that the IRS might find out about overseas accounts even if you don't disclose them: Foreign institutions are also required to disclose account holdings by US citizens.

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