Getting audited is not fun for anyone, but being aware of new trends can help taxpayers avoid a potential audit. CNNMoney.com recently put together a helpful list of five things you know about getting audited, check out a section of their article below or find the full text here.
1. Audits are on the rise
Now that your 1040 is out the door, you may be second-guessing yourself: Will the IRS come a-calling?
Well, the number of audits has risen every year over the past 10. And experts expect that trend to continue, what with the ballooning federal deficit and the additional $400 million earmarked for tax enforcement in 2010.
Even so, your audit risk in any one year is slim -- about 1% if your income is under $200,000, 2% from there to $1 million, and 6% for the über-rich, based on 2009 data. Those selected tend to be self-employed or have unusually large write-offs, says Trudy Moore, an enrolled agent in Stevensville, Montana. If you do get hit this year, it's likely to be for 2008 taxes: Audit letters typically go out 18 months after the filing date.
2. Delaying can cost you the right to fight