There are certain elements in tax returns that just set off alarm bells for the IRS. Naturally, neither you nor your clients want any of them in any returns that will actually be submitted—now or in any tax year. So here are five of the top triggers that will say to the IRS that someone hasn’t done his homework, courtesy of Steven Klitzner, a qualified tax attorney from Florida Tax Solvers.
5. Haven’t We Met Before?
If you’ve been audited before, there’s not much you can do to disinterest the IRS in any future returns you may submit. However, there is one thing you can do to lessen its scrutiny: change preparers. A tax preparer whose clients already have been subject to audits will be more likely to attract audit attention on their future returns.
4. The Devil Is in the Details—and So Is the IRS
Everything in life doesn’t fit into neat little boxes, and sometimes that includes the answers on an IRS form, too. If there was something weird or complicated about your, or your clients’, tax situation for 2011—an unusual business deal or a tax bill you can’t pay all at once—spell it out when you submit the return and you’ll be much less likely to draw the auditors down on your head. (In the latter case, be sure to include Form 9465, the Installment Agreement Request, along with a check for however much you can afford.)
3. Love Thy Neighbor, but Not Too Much
If your tax return includes charitable contributions that positively overflow with the milk of human kindness, the IRS will come knocking on your door to find out if you really were that generous in comparison to what you earned. You may indeed have decided to emulate St. Francis and give away your entire fortune (or what feels like it), but be prepared to prove it.