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Ways to Reduce Your Chances of Being Audited

February 10, 2019
Weisberg Kainen Mark, PL

Most dislike being audited by the IRS. Not only can it potentially cost a lot of money in taxes, penalties and interest, but it is a big hassle even if the IRS does not make any changes. While it is impossible to avoid all risk of an IRS audit, there are things you can do to reduce the risk of having to go through this experience.

Review Your Business Entity Status

If you are a business owner, you will want to make sure the business entity is properly established.  Seek proper advice from a corporate or transactional business lawyer. If audit avoidance is important for you, for example, you can incorporate as an S-Corp or an LLC to reduce your risk of being audited compared to a partnership or sole-proprietorship. Of course, deciding what business status you want will have a big impact on many things, so make sure to consider this carefully before taking action.

Explain Unusual Events

If you have anything unusual included when filing your taxes, make sure to include explanations. For example, if you are deducting significantly more in charitable donations this year than in the past, let the IRS know why this is the case. You can also include copies of canceled checks so that this type of event won’t be as likely to result in an audit.

Take Care with Offshore Accounts

Offshore accounts are important for many reasons, including reducing tax obligations in certain cases. Even with offshore accounts, however, you need to make sure you report it correctly when filing your income tax as well as other informational returns. This is a very complicated area and you should seek competent advice.

Work with an Experienced Tax Attorney

Whether you have already been notified that you are being audited, or you want to get advice on how to avoid an audit, talking with an experienced tax attorney is a good idea. We can help identify problem areas and make recommendations on how to best deal with the IRS. Please contact us to go over your situation and get the assistance you need.

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Weisberg Kainen Mark, PL

As experienced trial lawyers with a passion for justice, our firm provides clients with compelling advocacy, attorney availability, and creative solutions to your tax or criminal law matters.

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