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Pew Law Center Blog
September 9, 2011 Lawrence 'D' Pew

Five Tips for Avoiding an IRS Audit – A Guide for Arizona Taxpayers

While the very thought of an IRS audit would have even the most scrupulous Arizona taxpayers shaking in their cowboy boots, the average Arizonan can rest easy. The IRS, like all government agencies, has a limited budget when it comes to auditing taxpayers in Arizona and the rest of the US.

The IRS itself reported recently that their auditing budget would be focused primarily on wealthy Americans – those who earn more than $100,000 a year. And even if you are fortunate enough to earn more than that, there are still ways to lower your chances of getting audited by the IRS.

Tip #1: File Separately

If you are married and both you and your spouse contribute to your family’s high income, it may be a good idea to file your taxes separately if each return would show an income of less than $100,000. Filing separately is perfectly legal and could help you avoid an audit. And if you do get audited, only one return – not both – would be scrutinized.

Tip # 2: “Too good to be true” usually is

If a tax planners or preparer claims they can get you a huge tax return – be skeptical. If they’re doing something shady to get you a bigger return, you’re the one the IRS will go after, and if you get caught you could end up in court and be fined as much as $25,000.

Tip #3: Cut up Foreign Credit Cards

Credit cards tied directly to offshore accounts provide a very easy way for tax evaders to access hidden offshore funds. Understandably, holding one of these cards raises a red flag with the IRS. If you do have a credit card tied to an offshore bank, cancel it. Better yet, close your offshore accounts if possible.

Tip #4: Be careful with business deductions

Business deductions are closely scrutinized by the IRS. If you are running a legitimate, for-profit business, there are many expenses that are legally deductible. But if an expense is questionable or you can’t substantiate your claim, don’t take the deduction – it’s not worth it.

Tip #5: Don’t Talk Taxes as Cocktail Parties

Never brag to anyone (at a cocktail party or anywhere else) about how you paid less than your fair share of taxes. Turning you in to the IRS for tax evasion carries a reward of up to 30% of the taxes collected from the evader. If you want cash in on a tax cheat, the number to dial is 1-800-829-0433.

As a final word of advice: always keep records to substantiate any deductions or credits. If you do get audited you will be glad that you did.

At The Pew Law Center, PLL, we understand that if you do run into tax problems with the IRS, it can be overwhelming.  Whether you owe back taxes, haven’t filed taxes for several years, or have received an audit or wage garnishment notice from the IRS, the attorneys at The Pew Law Center, PLL can help you or your business with these and any other federal and state tax problems.

We are a dedicated debt relief law firm. We help people from Phoenix, Mesa, Gilbert, Queen Creek, Chandler, Scottsdale, Apache Junction, Tempe and throughout Arizona work through tough tax problems or file for bankruptcy every day. We can help stop the debt cycle and give you relief from your overwhelming, burdensome, and crushing tax problems. Please don’t wait another moment. Call us right away – our attorneys will help get you the fresh start you deserve.

Call (480) 745-1770 or fill out our contact form to get help from compassionate professionals. Stop worry and get help today.