Taxpayers, especially those who have claims in the areas listed below, should be prepared to provide the IRS with documentation to support their claims should the IRS audit their return. Jackson Hewitt Tax Pros can assist taxpayers with audit questions or concerns, even if Jackson Hewitt did not prepare the return in question.
“The best way to audit-proof your return is to ensure everything is accurate and in the right place,” said Mark Steber, Chief Tax Officer of Jackson Hewitt. “There are different levels of IRS audits, and the most common cause of an audit is due to tax return errors such as reporting income on the wrong line or form.”
However, individual returns can be flagged for review by computerized IRS screening, random sampling or an income document-matching program that compares the information in the tax return to information from the taxpayer’s bank, employer, W-2 and other tax documents. While the issues flagged by the document program are obvious triggers, there are other, more complex manners of choosing returns for audit.
The exact reasons the IRS analyzes a specific tax return are a closely-guarded secret. However, Jackson Hewitt advises taxpayers to be aware of the following red flags:
- Unusually large amounts of deductions claimed that seem unreasonable when compared to the number of deductions claimed on other tax returns with similar income, such as high charitable contributions or large expenses on rental property
- A large number of dependent exemptions claimed by a head of household with low income
- Unusually high deductions for casualty losses, home office expenses, and travel and entertainment expenses
- Significant nontaxable investment income, foreign source income or business losses
- Self-employment income and no expenses, specifically when claiming the Earned Income Tax Credit
Jackson Hewitt notes that many audits can be handled quickly and easily with the taxpayer providing some additional information. The most important thing to do after receiving an audit notice from the IRS is to acknowledge it and respond promptly.
“Even if you did the tax return yourself, contact a tax professional before sending information or additional money to the IRS,” Steber cautioned. “The IRS does not necessarily have all the information they need, so there may be an error in the amount they state you owe. Your preparer can help determine what to do and locate the information needed to respond.”
To find an office near you, visit www.JacksonHewitt.com/OfficeLocator.
About Jackson Hewitt Tax Service Inc.
Jackson Hewitt Tax Service Inc. is an innovator in the tax industry, with a mission to provide its hard-working clients access to simple, low-cost solutions to manage their taxes and tax refunds. Jackson Hewitt is devoted to helping clients get ahead with Maximum Refund and 100% Accuracy Guarantees. With close to 6,000 franchised and company-owned locations, including 3,000 in Walmart stores, and online and mobile tax solutions, Jackson Hewitt makes it convenient for clients to file their taxes. For more information about products, services, and offers, or to locate a Jackson Hewitt office, visit www.JacksonHewitt.com or call 1 (800) 234-1040.
Why Jackson Hewitt®?
We’re not tax machines. We’re Tax Pros who are happy to answer all of your questions, provide you with tips, and help you get smarter about your money.
We’ve seen it all — from the simple to the complex — and we’ll get you every credit and deduction you deserve. Our returns come with our Maximum Refund and Lifetime Accuracy guarantees – we’ll get it right or we pay you.
Our Tax Pros are there to help wherever you are. We’re conveniently located and offer a confidential, secure space to discuss your taxes. We’ll even get you started in advance with document drop-off or upload.