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IRS Red Flags

IRS Red Flag
IRS Red FlagCFO World

Be on guard. According to Sara Gould, CPA at Deming, Malone, Livesay and Ostroff, here are four IRS no-nos that might prompt an unwanted audit:

• Doesn't add up: "What you provide to the IRS and what a third party provides better match up," says Gould. "If not, the system will generate a notice that might prompt an audit."


• Abnormal deductions: Excessive deductions in relation to your income will trigger a question mark with the IRS that Gould says, "Isn't worth it."


• Child deductions: Divorced families should be aware and decide who will claim the child as a dependent and take the appropriate deductions and credits.

• Social Networks: Be careful how much private information you divulge on social websites such as Facebook and Myspace.  IRS agents are  now using these websites as a way to research and locate tax evaders.


 

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