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Does your tax return contain any of these red flags?

Do know someone who has received a notice from the Internal Revenue Service (IRS) about an impending audit? Have you been so unfortunate as to receive one? If so, you may be wondering how the IRS decides which tax returns to audit. Is it random? Is there a complicated algorithm they use to decide? Or, are there certain red flags that IRS agents look for when they process tax returns?

While the odds of receiving an audit notification tend to be low, there are things that might be on your tax return that could trigger one of those dreaded IRS notifications. To find out some tax items that the IRS usually considers to be red flags, read further.

What happens if you don’t file your tax returns?

As a citizen of the United States, you need to learn as much as you can about the tax system. While it's complicated, knowing the basics will go a long way in keeping you out of trouble.

Here's something you need to think about: You need to file your annual tax return on time.

Nonprofit corporation: Answer these questions about donations

If you are starting a nonprofit corporation, there will be many details that require your attention. Many of these are related to your financial and tax situations, so it's important to get on the right page from the start.

Many people assume that they can start a nonprofit corporation, collect donations, and not pay any taxes. While you may be right, it's imperative that you have a clear understanding of how donations come into play.

What are some of the top tax audit triggers?

There is only one thing worse than receiving notice of a tax audit: receiving notice when you have reason to believe that you may have done something wrong.

There is no denying the fact that a tax audit can be both unpleasant and stressful. Despite your feelings, you don't have any choice but to supply the IRS with the information they require. Neglecting to do so is only going to put you in a worse situation.

A tax mistake is not the same as tax fraud

It doesn't matter if you complete and file your own income tax return or hire a professional to assist you, there is always the chance that you will make a mistake.

It goes without saying that you do your best to avoid mistakes, but these have a way of popping up every now and again. After all, there is nothing simple about the IRS tax code.

The basics of how Michigan taxes lottery winnings

Winning the lottery can be an amazing stroke of luck. You can pay off your debts and indulge yourself and your loved ones. Unfortunately for some people, winning the lottery can result in tax issues. If you have won a lottery prize, that income is subject to federal, state and local income taxes.

In some cases, those who win money can find themselves in legal trouble if they fail to claim the income from lottery winnings on their tax return. If you regularly play the lottery in Michigan, you should take a moment to familiarize yourself with the tax rules for lottery earnings.

Will correcting or amending your tax return lead to an audit?

Mistakes happen. When you're talking about filling out complicated and confusing federal tax forms, it's easy for people who do their own taxes to make mistakes. Maybe you forgot to list your international bank accounts. Maybe you changed jobs and forgot about the W-2 from your former employer. It's even possible that a glitch in the tax preparation software you use could cause you legal and financial issues.

Calculating your taxes exactly is a precise process, and omitting any amount of data could impact how much you owe or how much you can expect to get back from the IRS.

What should you do about a tax audit?

No matter how hard you try to avoid an income tax audit, one could come into play at some point. In short, this means the IRS wants to learn more about your tax filing to make sure the information you provided is accurate.

You have every right to be concerned about a tax audit. Of course, this doesn't necessarily mean you will end up owing more money or facing a criminal charge.

Are you familiar with the common forms of tax fraud?

As a United States citizen, it's always a good idea to have a strong grasp of the tax system. In addition to federal taxes, you should know where you stand with regard to state and local taxes.

By understanding the system and doing whatever it takes to stay within the legal limits of the law, you never have to concern yourself with trouble. Unfortunately, there are times when people get the idea that they can pay less than what they owe. As a result, the IRS may step in and charge them with tax fraud.

5 key stats about IRS audits and income levels

You filed your taxes, and you honestly tried to do them correctly, but you're worried. What are the odds you're going to get audited? Did you make any mistakes that could trigger an audit, even if you made them honestly? Is the IRS going to come calling sooner rather than later?

These are all concerns that a lot of people deal with during tax season, and they can generate quite a bit of stress. To help you see the real picture, here are some key stats from the IRS Data Book:

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