Friday, September 19, 2014

Getting Audited? First Rule: Don't Panic!

Dread. Anxiety. Fear. It happens. Immediately upon learning you've been targeted for an audit, the first thing to do is not panic! Look over the notice carefully. Take deep breaths. Often, the IRS is just questioning one deduction that appears unusual to them.

Even if the matter appears simple, there are pitfalls that can trip up even the most careful taxpayer. Although the standard substantiation requirement for any deduction is a proof of payment combined with evidence that the payment was for an allowable deduction, there are special circumstances, such as automobile use deductions that have extra substantiation requirements.

In addition, the 1993 Clinton tax reform act added a new type of substantiation requirement for charitable deductions over $250 in which you must have substantiation of the deduction in your possession before the date of your tax return.

To read full article, click here.

Source: Narine Harootoonian (

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