How Florida Taxpayers Can Avoid an Internal Revenue Service (IRS) Audit
Even though the Internal Revenue Service may seem all powerful, it does have a limited budget when it comes to auditing taxpayers in Florida and throughout the US. The IRS recently reported that it would focus its efforts on wealthy Americans who earn more than $100,000 a year. If you are one of the "lucky" ones to fall into this tax bracket, there are ways to lower your chances of getting audited.
If you are married and both spouses contribute to your family's income, it is legal to file taxes separately. This could help you avoid an audit if the separate returns each show an income of less than $100,000. If you were to be audited, it would only be on one of the returns, not both.
If you have a credit card tied to an offshore bank, cancel it. These credit cards are a very popular way for tax evaders to easily access their hidden offshore funds, and they raise a red flag with the IRS.
Never brag to anyone about how you got away with paying less than your fair share of taxes. If the person you bragged to (or someone else who overheard you) turns you in to the IRS they could be rewarded up to 30% on the additional tax collected from you. If you want to turn in a fraudulent taxpayer, the number to dial is 1-800-829-0433.
Be skeptical of tax planners or preparers who claim that they can get you a huge tax return, or that there is a secret structure that can insulate you from paying taxes. If you get caught and end up in court you could be fined as much as $25,000 for wasting the court's time.
Be careful with claiming business expenses. If you are running a legitimate, for-profit business, there are many expenses that are deductible. If the expense is questionable or you can't substantiate your claim, don't take the deduction.
Of course, always keep records to substantiate your deductions. If you do get audited you will be very glad that you did. Find out more about how to avoid an IRS audit at 6 Ways to Keep the IRS at Bay.
If you live in the Jacksonville, Florida or Orlando, Florida area and require assistance with tax planning, please contact Wood, Atter & Wolf, P.A. for legal counsel.
