The first goal for many Nebraskans today is to get their income taxes filed before the deadline at midnight. For some, after the sigh of relief comes the fear of an audit by the Internal Revenue Service. Berger and O’Toole CPA Bob Berger says there are a few red flags the IRS looks for when reviewing filings.
Berger says the IRS uses what they call a discriminate income function as a score. That helps the IRS identify taxpayers that have variances from the norm. Berger says, “Those are the ones that are under-reporting income. You forget about the 1099 or a W-2, you leave it off by mistake. The IRS gets that information so they will target you for an audit.”
Berger says they also look for math errors but those are few and far between. He says they also look for high income tax payers. He says, “If you have a year you made a lot of money, you are in a higher tax bracket and the odds of you making a material error or something that is going to generate revenue for them is much higher.”
If you can’t get your taxes filed by the deadline, Berger says request that six month extension. This really only benefits those receiving a refund because all taxes owed are still due today.