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2014 IRS Audit Report

Editor's note: This story in WalletHub about the best ways to avoid an audit quotes William F. Shughart, J. Fish Smith Professor in Public Choice at Utah State University.

By John S. Kiernan

The fear of an audit is a driving force deeply engrained in the psyche of the American taxpayer. In fact, it’s the third biggest reason why people pay their taxes and do so honestly, according to the Internal Revenue Service, ranking only behind personal integrity and the fact that third parties already report certain income information to the feds. But is our fear ultimately warranted?

“#1 - Live in a district or state represented in Congress by a member serving on a committee overseeing the IRS and call them if the IRS is abusive. #2 - Be careful in claiming earned income tax credits, deductions for charitable contributions, both in cash and in kind, and reporting losses from self employment (Schedule C); set up an S-Corp or LLC and hire a good (aggressive) tax preparer.”

- William F. Shughart II, Jon M. Huntsman School of Business at Utah State University

To read the full story click here.