In many cases, the best defense against something is to not encounter it at all. Such is the case with being audited, as anyone who has been audited can tell you. If you can avoid an audit, you should. Being subjected to the pain of an audit is not out of the question for anyone, although people who make less than $200,000 a year have a smaller chance of being audited than those who make more.

In fact, last year only about 1 percent of all individual returns were audited, about 1.6 million, out of a total of 141 million returns that were filed. However, about 80 percent of those who are audited are subjected to paying more taxes.

So how can this be avoided? One expert has five baseline tips:

  • Don't deduct a home office as an expense, unless it truly is a home office.
  • Don't claim part of your phone bill as a business expense. It's better to get a second line.
  • Don't be unclear about "miscellaneous" expenses. The vaguer you are, the more likely you'll have to explain it later.
  • Don't have too many charitable deductions. Write one big check instead of paying in cash to avoid suspicion.
  • Don't file late. If you are going to be late, then get an extension.

Of course, if someone is subjected to an audit regardless of the safeguards they've made, a good first step for them to take is to seek the services of an experienced tax and audit defense attorney. With an audit could cometh a big tax bill, and avoiding a tax assessment is always easier than challenging it after the fact.

Source: New York Daily News, "5 ways to stay off the IRS radar with tax audits on the rise," Robert Dominguez, Jan. 6, 2012