No one likes to hear the word audit especially when it comes from the Internal Revenue Service. but there are ways to avoid an audit after you filed your tax return and here’s how you can achieve an audit free year in the coming tax season.
1. Don’t amend your return!
Do your best to file the tax return correctly the first time and on time. If you amend your tax return, then it sends up a red flag to the IRS and you will probably find yourself under the scrutiny of an audit. If you are a small business the last thing you want is a sales tax audit, believe me! Look at the wayfair sales tax case as an example.
2. Consult a tax preparer/tax attorney
If you’ve had a particularly hairy year when it comes to your finances and taxes, then it may be beneficial to go to a professional for help. With the help, of a professional preparing your tax return you are less likely to see an audit because they are professionals and know how to skate under the radar. Use a professional; avoid and audit.
3. Explain yourself!
If you have a complicated tax situation and feel that you may be misunderstood or the information on your tax return may be misunderstood, then it is important that you add a letter of explanation. Make sure the letter details why your return is the way it is. This will help the IRS agent reviewing your return. Moreover, it will ensure they have enough information to make sure that they can avoid a costly and time-consuming audit on your behalf.
4. If you can’t meet the deadline, then ask for more time!
There is no law against asking for an extension to file your tax returns. It will not throw up a red flag and it will not open you up to an audit. In fact, the IRS would prefer that you do your taxes once, and right! So, if you are a self-employed person or there is something else hindering you from filing your tax returns in a timely manner then it would be better for you to file a tax return extension request and wait until you have all the paperwork, and then file your tax return. Please note that extensions only last until October 15th of each year. If you are a small business, then sales tax nexus is a great place for tax compliance assistance.
5. Make sure every box is filled out, even if it doesn’t have to be!
You may find yourself being audited. If your return look suspicious if there are no figures to put in a box put $0 or write n/a (as in not applicable). Do not give them any reason whatsoever to challenge your return and put yourself at risk of an audit. If you need help filling out a return, contact sales tax nexus.
At the end of the day if you’re going to get audited it’s going to happen, but you can take the steps listed in this article to help you avoid any kind of audit whatsoever. Make sure your tax return is as clean and clear as possible so that you can avoid the unnecessary task of a trip to the IRS office.
