Tag: Finance

What are the signs that you may face an IRS audit?

What are the signs that you may face an IRS audit?

IRS audit is a term that can get any person in tension as no one wants to face it. IRS audit is conducted when the Internal Revenue Service has a doubt that you are not following the tax laws, and they decide to have a look at your accounting books to clear their doubt.

IRS Audit Orange County is done to find any mistakes or hidden incomes that have led to illegal deductions in the taxes of the person. There are certain signs that increase the chances for you to face an IRS audit.

Having a massive income

  • If you have earned a lot of money as compared to previous years, then there are high chances that it may catch the attention of the IRS.
  • According to the records, most of the people who were audited by the IRS had a high income, so if you have a high income, then you may get audited.
  • So, you must have an experienced and efficient tax preparer to minimize the issues and problems.

Non-mentioning cryptocurrency as income

  • Cryptocurrency is the modern currency, and most of the people don’t mention it in their books.
  • If you make any transaction using digital currency, it is taxable, and you need to report it.
  • Most people are not aware of this fact, and because of it, they get audited by the IRS.

Facing constant losses

  • If your business has been facing constant losses for multiple years, then it is also a sign that IRS may contact you soon.
  • Consecutive losses raise the eyebrows of IRS officials and make them doubt its reality.
  • So, mentioning losses again and again and bring IRS towards your business and get you audited by them.

To put it in a nutshell, there are several indicators that you may face an IRS audit, and if you know about them, you can avoid it easily or stay prepared for it.