Employ “Audit-Proofing” Techniques To Be Free of The Worry & Costs of IRS Intervention.
There are over 30 ways to audit-proof your return against the IRS. Here are two powerful ways:
(a) File an extension for your tax return. File as late as legally possible, with typically is October 15 following the tax year. Because of the IRS computer’s “first come, first serve” system, returns filed early are more prone to audit.
To file extensions, use IRS Forms 4868 for individuals and 7004 for entities such as LLC’s and partnerships. Understand, that filing an extension does not postpone the payment of any taxes you owe.
This is not its purpose. The purpose is to reduce your chances of an audit, stop the April 15th mad rush and numerous other advantages.
(b) Attach written explanations to your return, for items that you believe unusual or audit prone. Include the appropriate tax law citations with these explanations.
For example for high travel and entertainment deductions you can attach this audit-proofing statement: Auto, entertainment, and travel deductions are necessary for my business and are done in strict accordance with the substantiation requirements of IRS regulation 1.274-5T(c), including maintaining written account books with date, place, persons, amounts and business purpose.
Also on file are related bills and receipts as well as notarized statements explaining and attesting to the business use and purpose of these items.
Sign and notarize the statement. This will help keep you out of the audit pile.
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