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1.
What is the most common IRS audit flag?
Math mistakes. Reviewing your return can reduce your chance of getting a letter from the IRS.
2.
How long after filing your taxes should you keep your supporting documents and records?
Three years. The audit window is three years.
3.
When considering your options for dealing with a tax bill that you cant pay, remember that _______ will be added to your tax bill until it is resolved.
Interest and penalties. Although the IRS may be willing to negotiate a settlement of your tax bill, there will generally be added penalties and interest charged for the unpaid balance.
4.
Why is the home office deduction an audit flag?
Office space often gets used for personal purposes. Personal use invalidates its purpose as home office space.
5.
When it comes to collecting on back taxes, the IRS is more likely to take action to seize your primary residence if you have not cooperated with their efforts to collect back taxes.
True. The IRS will attempt to gain your cooperation in the payment of back taxes and will typically go after your residence only as a last resort if you are uncooperative.
6.
When being questioned by the IRS during an audit, providing more information than is being asked for is an excellent strategy for winning.
False. The audit agent doesnt need that information, and he or she may even open up another investigation on you.