Criteria used by the IRS to choose candidates to audit are a secret held tighter than any at the CIA. A letter notifying you of a clerical mistake or calculation is not an audit notification. These communications are simply IRS clerical staff who, when processing returns, spot simple mistakes. When receiving one of these, quickly address the changes requested. Forward the amended return back to the IRS and go on with your life. A taxpayer will never know but this interchange may remove a taxpayer from the audit list.
The focus here is to inform taxpayers how to read road signs that could lead to audit quicksand.
The audit elves use charitable giving to flag taxpayers for audit. The percentage of income by a taxpayer given to charity has been reported to be one of their top five red flag markers. Biblically tithing to one’s house of worship is promoted. A tithe is 10% of April household’s income. Common sense dictates 10% or less giving to charitable causes would not raise an audit flag. Somewhere beyond that number begins to raise the audit flag. If the taxpayer does not use a charitable deduction or variation thereof to calculate their tax, the audit alarm bell will remain silent.
The United States tax code contains almost 4,000,000 words. Several sections present exceptions a filer can use to juice up their return using charitable gifts. As with all things that the IRS use, exceptions display conduct attributed to tax theft. They send out the audit notice because potentially this family is not rendering the correct amount of tax due to Uncle Sugar. Remember we have the Bible and the tax code, the tax code is now larger than the Bible and growing as though it were two-year-old taking steroids.
Your federal government advocates charitable giving, but it must come after they receive their slice of your taxable pie.
