Local CPA Gives Audit Prevention Tips

Tax day is coming up shortly, and making sure you've filed on time doesn't mean you won't be audited after the I.R.S. receives your form 1040. While the I.R.S. says fewer than one percent of returns will be audited, you probably don't want to be in that one percent.

Tyler C.P.A. Roddy Hogan says there are a few red flags federal auditors look for. Some of them are simple things like rounding numbers to the nearest ten or hundred. "If I spent $296 on something, I need to go ahead and state it at that and not round it up or round it down. Even if you're trying to be fair, don't do that."

Some professions are more likely than others to attract unwanted attention. Hogan says anyone who is paid mostly in cash, like waiters and waitresses stand a better chance to be audited. "Even professionals like me. The I.R.S. loves to look at doctors, lawyers, and accountants because doctors, lawyers and accountant receive cash."

The I.R.S. says another possible red flag is business miles. If you travel a lot for your job, especially for your income category, Hogan advises his clients to make sure they have all the miles they deduct documented. "The computer will do a lot of the work for them. And if it seems like it's too high in regards to what I'm making, they'll probably audit me."

The I.R.S. says if you have any questions as to whether a deduction you're taking will bring up a red flag, go ahead and write them a note. It can even be on a piece of note book paper. It doesn't have to be anything fancy, just so long as it explains why you've done what you've done.