Few words in the English language set off alarm bells like the word “audit.” The good news is there are ways to reduce the likelihood the Internal Revenue Service will tag you for an audit. Nevertheless, if a letter from the IRS does appear in your mailbox, don’t panic.
Statistically, the IRS only audits about one percent of taxpayers with incomes under $200,000, according to the tax experts at the Oklahoma Society of Certified Public Accountants. There are red flags that can raise the likelihood you’ll be audited, however.
Here is another helpful tip to protect yourself against an audit:
Do report a foreign bank account. Failure to report a foreign bank account can lead to severe penalties, and the IRS has made this issue a top priority. Make sure if you have any such accounts, you properly report them when you file your return.