February 2016

Steve Katz comments on the “Top 15 Red Flags Triggering an IRS Audit” for The Street


Writing off expenses that you kept track of for the past year allows you to lower your tax bill, but utilizing restraint will help you avoid having the IRS question the legitimacy of the deductions and launching a time-sucking audit…

The income you received needs to be reported. The IRS can enforce this from its matching program, which allows the agency to check what is reported to it by third parties such as employers or even brokerages compared to what the taxpayer reports on his return, said Steven Katz, a tax controversy partner at Sideman & Bancroft in San Francisco.

“As to income that is actually reported on a return, the IRS often looks at income events such as unusual changes in income from year to year,” he said. “The IRS also relies on whistleblowers and informants who have information about a taxpayer not reporting all of their income.”