IRS audit incentives and trigger factors explained
The piece explains how the IRS targets returns likely to owe substantial taxes, noting high income and passive income scenarios raise audit risk. It covers triggers like 1099 mismatches, large travel and entertainment deductions, business auto expenses, home office claims, hobby losses, barter income, missing W-2s, and filing tricks. It also notes audits follow computer screening but are reviewed by revenue agents, with preparer involvement advised.
MENTIONED IN THIS ARTICLE
Internal Revenue Service
IRS
Richard Fe
Sinehal
Stanley Burnstein
Kansas City
Burnstein
O’rourke
O’ Rourke
Scripps Howard News Service
Reduce Taxes Through Income Averaging
Taxpayers using the income averaging method of tax computation can save money, the IRS says. This method helps when a taxpayer's income jumped in 1986, with Schedule 6 and base period rules shaping eligibility.
MENTIONED IN THIS ARTICLE
Internal Revenue Service
IRS
Checklist For Dependent Exemptions
The guidance lists five tests to claim a person as a dependent on a federal tax return. It covers support provided, the dependent’s income limits, citizenship or residency, relationship or household criteria, and marital filing status. A yes to all five indicates eligibility to claim the person as a dependent.
Divorced or Separated Parents Can Claim Medical Expenses
IRS reminds divorced or separated parents who haven't lived together for the last six months and who share over half the child's support that both can deduct the child's medical expenses. Previously only the custodial parent could claim such expenses.
MENTIONED IN THIS ARTICLE
Internal Revenue Service
IRS
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