irs tax audits Archives

Why is the IRS auditing my business associate and me?

The IRS might choose to review your tax return in detail, particularly if you have dealings on record with individuals under audit. In fact, the IRS could decide to audit anyone at any time. There are only a few limitations on this power, although internal practices tend to limit tax reviews to returns filed over the past three years. The bottom line is that many Pennsylvania individuals and companies are audited every year — it is not an accusation of wrongdoing.

What is legally deductible from federal taxes?

Many Pennsylvania businesses owners and individuals like the control and confidentiality that comes from preparing and filing their own taxes. However, this approach is often at best time-consuming. One of the largest pitfalls involves tax deductions and credits. In extreme cases, you could potentially file a faulty return that leads to fines, audits and even legal battles with the IRS. 

Why the IRS may audit you for real estate losses

Deducting rental losses on Pennsylvania real estate properties can be an attractive option for people who own real estate since there is no limit to how much that can be deducted. However, Time.com warns that unlimited deductions is precisely why the IRS carefully scrutinizes returns with real estate losses deducted. The IRS places strict rules on who may claim real estate losses, and any return that looks suspicious can be flagged for a tax audit.

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