The Tax Lawyer-Robert Wood “What Is Your Audit Risk”

Do You Feel Lucky?  No one wants to be audited.  And yet as a tax lawyer advising clients about tax issues, I’m required by Treasury Department rules to assume every return will be audited.  In truth, there might be only a 2% chance of audit. When I say there’s a 50/50 chance a tax deduction will be upheld, I must assume it will be examined.

Because of these strict standards, it can be awkward to talk about audit risk.  But understandably, no matter how sure you are of your return, you don’t want to be audited.  You want your return to look plain vanilla, and nothing prevents you from trying to make it sail through as long as you fully and fairly complete it.  See 10 Ways To Audit Proof Your Tax Return.

Audit Witchcraft?  There are many old wives’ tales about what does and doesn’t trigger an audit, but the latest IRS stats are worth a look.  The IRS has pulled back the shroud on audit rates in its 2010 Data Book, providing important clues about your chances.  The numbers reveal some surprising percentages.

Annuity News Now

Read more..http://blogs.forbes.com/robertwood/2011/03/17/whats-your-irs-audit-risk/

Comments

[Morarity]

lol, "I’m required by Treasury Department rules to assume every return will be audited." There is no such requirement. And asking this guy about IRS audit practices is laughable. I mean no offense by that. He just hasn't ever worked for the IRS, has no idea about their classification process or methods, and doesn't even work on very many tax issues in his practice. To call him a "tax specialist" or "expert" is just, well, wrong. Non-tax folks don't know this, but tax law is a very very wide field and thus particular attorney doesn't have a very wide ranging tax practice. The piece would have been better if it was with a CPA who actually works with tax returns and IRS audits.