Common Causes of IRS Audits in Baltimore

During income tax season, acknowledge and avoid common causes of IRS audits in Baltimore by paying close attention to details on your return. Some potential audit triggers are very simple, like ensuring signatures are in the right place and double-checking Social Security and employer tax ID numbers. Other audit triggers are more nuanced.

If you need help from an experienced Baltimore tax attorney, call Whiteford Tax Defense today. Our seasoned tax lawyer is ready to help you fight unfair audits and present your case in the best light possible. We have helped hundreds of clients through audits and are prepared to help you, too.

What are the Most Common Causes of IRS Audits?

One of the most common causes of Baltimore IRS audits is income that changes drastically from year to year. If a married couple earns $200,000 one year and then claims to earn only $30,000 the following year, IRS staff will likely examine their return more closely. In most instances, everything will work out if the couple is telling the truth and has the necessary W-2 or 1099 forms to support their claim.

The same concept applies to organizations of all sizes. A major upheaval in business income is a common cause of IRS audits, especially if the reported income is much lower than usual or lower than expected in an industry that should thrive.

Other Common Audit Triggers

Other common scenarios that often start an IRS audit in Baltimore include:

• Rounding numbers up or down: Tax forms should be accurate to every penny
• Business losses: While many businesses take a net loss in a given year, claiming a loss too often may lead to an audit
• Disproportionate deductions: When a tax return includes deductions that do not make sense compared to the income
• Large donations to charity: Charitable donations should make sense on a tax return, huge donations may trigger an IRS audit
• Missing income: When a filer fails to include all of their income sources, or their income does not match records with third parties like PayPal
• Home office deductions: While many filers do need a home office, the size of this deduction should make sense with the type of business and the percentage of home space used to conduct business

Finally, cryptocurrency transactions can trigger an IRS audit. While these investments are relatively new in the realm of income, the US government is aware of them.

Contact a Skilled Attorney to Learn More About Common Causes of IRS Audits in Baltimore

Audits are stressful, but they can be made easier with a talented attorney. Organizations or individuals should gather their receipts and bank records and reach out to a skilled attorney for professional help.

At Whiteford Tax Defense, we have plenty of experience in this arena. If you need help avoiding the common causes of IRS audits in Baltimore, schedule an appointment with our skilled attorney today. We look forward to earning your business with our diligence and attention to detail, and we are ready to help individuals and organizations of any size. Call now to get started.