Ask TaxMama ... Ten Ways to Invite An Audit ... March 28, 2003

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Ten Ways to Invite An Audit

Courtesy of NATP

National Association of Tax Professionals (NATP) Appleton, WI - When most taxpayers file their tax returns for the previous year, they send them with a hope that they made no mistakes and that the only additional communication they will receive from the IRS is a refund, if they're due one. Yet, millions of taxpayers will hear from the IRS because they made a common, human-error mistake or if their returns show less income than the records filed by their employers and financial institutions. Following are ten common ways to invite a tax audit and attract the attention of the IRS.

Math errors. Arithmetic or transferring numbers incorrectly is the most common error taxpayers make on their returns.
Forgetting to report some interest and/or dividends.
Incorrect tracking of investment basis. In addition, this step is often calculated incorrectly resulting in double taxation on dividends or capital gains that were reinvested into stock.
Using the wrong tax tables or tax table amount.
Forgetting to include all of the necessary forms.
Omitting social security numbers.
Forgetting to have all of the proper signatures in all of the proper places.
Making the check out incorrectly or forgetting to sign it. (Checks need to be payable to the United States Treasury, not to the IRS.)
Not using the preprinted label or the envelope provided with the return.
Missing the deadline to file a return or request an extension.

Tax professionals are accustomed to handling tax returns and familiar with errors that invite audit, thereby taking measures to reduce them. Selecting the right tax professional will save you time, headaches, and oftentimes money. To find a professional tax preparer, look to NATP. NATP maintains a listing of professionals in your area here

You can also call NATP at 800.558.3402, ext. 3 for a listing of qualified tax professionals in your area.

Members of the National Association of Tax Professionals (NATP) strive to assist taxpayers with information and knowledge. NATP is a nonprofit professional association founded in 1979 and is committed to excellence in the tax profession. Headquartered in Appleton, Wisconsin, NATP was formed to serve professionals who work in all areas of tax practice and has more than 16,000 members nationwide. Members include individual practitioners, enrolled agents, certified public accountants, accountants, attorneys, and certified financial planners. Learn more on the NATP website.