The most common audit mistake is providing copies of your other years' tax returns. Doing so greatly expands audit risk by giving the auditor many things to look at than he otherwise would not see, like patterns of income and deduction amounts over multiple years. The audit notice will ask you to bring them. But, here's something you should know. IRS rules state that you are required to provide only the information relating to the specific tax year listed in the audit notice. You are not required to provide information relating to any other tax year, except as it might relate to the year under audit - as carryover items might. If the auditor asks you for a previous return, simply say, "I don't believe that this relates to the year or issues being examined." Almost always, that will end the matter
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Sunday, February 26, 2012
Tax Time Again Most Common Audit Mistake
The most common audit mistake is providing copies of your other years' tax returns. Doing so greatly expands audit risk by giving the auditor many things to look at than he otherwise would not see, like patterns of income and deduction amounts over multiple years. The audit notice will ask you to bring them. But, here's something you should know. IRS rules state that you are required to provide only the information relating to the specific tax year listed in the audit notice. You are not required to provide information relating to any other tax year, except as it might relate to the year under audit - as carryover items might. If the auditor asks you for a previous return, simply say, "I don't believe that this relates to the year or issues being examined." Almost always, that will end the matter
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