A tax audit is a procedure used by the
IRS to conduct a thorough
inspection of a taxpayer's tax return. The most important things an
airline flight crewmember can do prevent tax
audits and get through tax audit without penalties is:
-
Be honest - Do not try to write off
expenses that are false or not allowed
-
Keep good records - Poor recordkeeping
gives many taxpayers a problem during a tax audit
-
Don't make mathematical mistakes - Errors
in a tax return can trigger IRS Audits
If an underpayment is discovered, penalties on the
underpaid tax could be around 20%, plus interest on the underpayment could be
due. If the underpayment is due to fraud, a more serious course of action
could result bringing the tax penalty up an over 75%. The most serious
case of fraud, tax evasion, could lead to legal trouble, including possible
imprisonment.
Airline flight
crewmembers can write-off many aviation expenses from their tax returns, but
it is possible to go too far. Certain red-flags can trigger a tax audit,
though these red-flags are kept secret by the IRS. Good judgment on the
behalf of the tax paying airline crewmember
is the best practice to avoid IRS tax audits, yet that alone won't necessarily
prevent one. If a taxpayer is audited, it is important to gather tax
records and prepare for it. It might be a good idea to seek the expertise
of a CPA
or Tax Attorney.
An IRS tax audit can be triggered randomly, or by
an error in filing a flight crewmember’s tax
return. In recent years, the percentage of taxpayers that were audited
is 1% to 2% of the tax paying population. Some of the situations that
might increase the likelihood of an audit are:
-
High Income (Greater than $100,000 increases the
odds according to many experts)
-
High deductions (Take the deductions you are
entitled to, but stretching deductions beyond what is reasonable can increase
the odds of an audit)
-
Mathematical Errors (Mistakes on a flight
crewmember's tax return can increase the odd of a tax audit)
-
High Charitable Contributions (When the amount
donated to charity is significantly higher than others in the same tax bracket,
a red flag could be triggered by the IRS)
The EZPERDIEM
network is all about helping flight crewmembers simplify their airline related
taxes. While EZPERDIEM.COM cannot realistically prevent IRS audits for
flight crewmembers, it can and does do everything it can to help
flight crewmembers get the aviation tax
deductions they are entitled to in an honest, simple, organized way.