Trends in Tax Audits

This article is taken from Ron Meuller's "Tax Tips You Can Bank On". You can subscribe free at Home Business Tax Savings.

Trends in Tax Audits

For the second half of 2010, and especially as
we enter 2011, this is what my ‘spies’ tell me
we can expect…

More “Correspondence Audits” – that’s
where your favorite Uncle (Sam) sends you
a love note ‘asking’ you to ‘clarify’ one or
more items on a previously filed tax return.

If you are going to be audited, this is actually
the type you hope to get. The scope is limited
to one or a few specific categories, they tell
you exactly what records or documentation
they want you to provide – and it’s all done
by mail. You never have to look the beast
in the eyes, and you can call them any nasty
thing you want (not in writing, of course).

What will these audits be focusing on?

- Earned Income Tax Credit
- Large Charitable Contributions
- Home-buyer Tax Credits
- Employee Business Expenses –

Deductions that W-2 employees claim for
business expenses that were not reimbursed
by their employer.

And, of course, they will also zero-in on the
SELF-EMPLOYED. In addition to ongoing
scrutiny on Vehicle Expenses and Entertainment,
they will also look into Advertising Expenses.

“To be forewarned is to be forearmed.” You’ve
been forewarned, now arm yourself with RECORDS.

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laborious, you haven’t taken a look at the software
program available at Home Business Tax Savings

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