Causes of IRS audits

While Minnesota residents should not be overly concerned about being audited by the IRS, they should be aware of what could prompt an audit. There are multiple factors that can initiate a review of a return.

A large portion of the IRS's resources focuses on verifying that top income earners are paying their taxes. Tax return errors for a taxpayer who earned several million dollars the year before is likely to yield more money than a mistake on a tax return for someone who earned around $50,000 for the same year.

Another type of return that may garner a closer look by the IRS is one that reports very little income or none at all. In 2016, nearly 3.25 percent of the returns that had no adjusted gross income were selected for an audit. Even though many taxpayers truly have no income to declare, it is also likely that someone who reports no adjusted gross income could be misrepresenting how much he or she really earned.

Business owners should also be careful of what they put on their return. Business deductions will be cause for a closer look if they do not make sense or seem to be related to a hobby instead of a business activity. It is important to be aware of the differences between business and unreimbursed employee expenses, both of which are reported on separate areas of the return.

Extremely high itemized deductions are also a red flag. If the amounts reported are much higher than average, the IRS will want to take a closer look.

A tax law attorney may advocate on behalf of a client who is being audited by the IRS. A lawyer may advise clients about the tax laws that are pertinent to their case and may work to get any penalties and interest assessed on overdue taxes reduced.

No Comments

Leave a comment
Comment Information

We Can Help. Contact Us.

Tell us about your case. Bold labels are required.

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

lightbulb

Proactive

We start with a proactive approach through mutual education.

Note book

Prepared

We expect the unexpected, so we are always prepared.

handshake

Professional

Our attorneys not only look professional but we adhere to the Highest Professional Standard.

  • Experienced Attorneys
  • Prepped For Trial
  • Attacked With The Groshek Method
Why Hire Us Learn More

Groshek Law PA
302 N 10th Ave
Minneapolis, MN 55401

Phone: 612-424-5829
Phone: 612-424-5829
Minneapolis Law Office Map

Groshek Law PA

Call for a consultation

Non-interactive Map of Groshek's Minneapolis Law Firm