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Ten Ways to Avoid IRS Scrutiny
By Cindy Hockenberry, EA
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.
The following are ten common taxpayer errors that gain the
attention of the IRS - the don't list, if you will.
- 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 all social security numbers or submitting incorrect numbers. Double check!
- Forgetting to sign 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.
[TaxMama adds: Putting the state check in the IRS envelope and vice versa]
Tax professionals are accustomed to handling tax returns and familiar
with errors that invite audit, thereby taking measures to reduce them.
Additionally, if they use electronic filing, it reduces errors and
speeds refunds. 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 at www.taxprofessionals.com.
You can also call NATP at 800.558.3402, ext. 3 for a listing of
qualified tax professionals in your area.
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Courtesy of NATP
Published TaxMama.com 4.02.04
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