This is my Uncle Bernie’s favorite time of year. Spring is in the air and April 15th is just around the corner. Good ole Bernie works as an IRS auditor and is rather proud of his status as one of the most feared individuals in the Country. He was a bit of a geek in high school and often found himself at the wrong end of a garbage can at lunch time so he takes pleasure in being the biggest bully on the adult playground. He won’t admit it, but I have a feeling one or two of the jocks who tortured him in school have found themselves at the wrong end of an audit. Uncle Bernie loves to tell the story of how he made a CEO cry and beg for mercy and is especially fond of talking about how women try to flirt their way out of paying more taxes. He’s not a nice man but I never forget his birthday and he’s at the top of my Christmas card list. We recently had our favorite uncle over to the house for dinner and he was kind enough to share with us a few red flags that are sure to catch the tax man’s attention. He swore me to secrecy but I am pretty sure he doesn’t read my blog so here are Bernie Berthold’s top 5 ways to find yourself in the hot seat.
1) Make a lot of money.
A high income ups your odds of catching unwanted attention, and the deeper your pockets, the more attractive you become to the auditor. Duh.
2) Declare lots of expenses.
Steep expenses are another factor that will send a return under the magnifying glass of an auditor. If anything seems excessive, the IRS will take a closer look. So, if you do have high expenses, provide an explanation and back up if possible.
3) Write sloppily and include lots of ink smudges.
This one is a particular peeve of Bernie’s; he believes good penmanship is next to godliness. A carelessly finished return, either incomplete or hard to read, is an invitation to the tax man.
4) Give lots of dough to your favorite charity.
Donating to charity is admirable, but be sure that you’re careful when you declare your donations as deductions. The IRS looks at the charitable donation deduction with unscrupulous attention. Besides, the IRS’s favorite charity is the IRS. They are not amused by your generosity.
5) Declare your silk pajamas as a home office deduction.
Home office expenses are automatically a red flag for the IRS so be very careful when writing off business expenses. The $500 coffee make you bought “for your office” probably doesn’t count.
Well, I’m off to wrap Bernie’s special “for no particular reason” gift. I am adding to his collection and gifting him with a Robot Series Calculator. The display cover on this calculator opens easily with the push of a button and contains ample space for your company logo or promotional message. The full function calculator has soft touch keys, side comfort grips, and an 8 digit display. I’m pretty sure he’s on to me, but I have never been audited so I’m sticking to my plan. As Bill Maher once said, “Your taxes are due a week from today. You can make out your check directly to Halliburton.” Funny guy that Bill.