Common Issues that Lead to Tax Audits
An IRS is one of an individual or company’s biggest nightmares. These audits do not come out of nowhere, and they often follow patterns. Here are some common reasons why the IRS would audit a tax return. One of the top reasons for an audit is failing to report all income on a tax return. The IRS receives reports of income, and they compare it with what you have reported. The agency has ways to measure your income. If it detects a significant difference, it may launch an audit. Large deductions are another trigger for the IRS. If your deductions seem totally out of sync with your financial situation, it could raise red flags. For example, if you have business deductions that are totally out of sync with your business,…