The High-Risk Tax Audit Areas
The odds are low that your tax return will be picked for an IRS audit. The IRS does not have sufficient personnel and resources to examine every tax return, so the IRS selects only those tax returns which, upon preliminary inspection, have high audit potential — those that are most likely to result in a substantial tax deficiency. In recent years less than 2% of all individual income tax returns have been audited. However, your chances of an IRS audit are higher depending upon certain types and amounts of income, your profession, and the types of transactions and tax deductions claimed on your tax return.
Your chances of being audited by the IRS are greater under the following circumstances:

  • You have large amounts of itemized deductions that exceed IRS targets.
  • You claim tax shelter investment losses on your tax return.
  • You have complex investment or business expenses on your tax return.
  • You own or work in a business which receives cash and/or tips in the ordinary course of business.
  • Your business expenses are large in relation to your income on your tax return.
  • You have rental expenses on your tax return.
  • A prior IRS audit resulted in a tax deficiency.
  • You have complex tax transactions without explanations on your tax return.
  • You are a shareholder or partner in an audited partnership or corporation.
  • You claim large cash contributions to charities in relation to your income on your tax return.
  • An informant has given information to the IRS.
There is a wealth of information on the internet to address many of the issues tax can effect your tax status. I’ve listed a few feeds and links to a few important resources.
Government Links
The Internal Revenue Service
Downloadable tax forms and publications as well as a lot of great tax advice.

California Franchise Tax Board

State of California Income Tax forms and information
Social Security Administration
Learn how the Social Security Administration can help with your retirement, medicare, disability, survivorship and other benefit questions.U.S. Small Business Administration
You don’t need an MBA to use the SBA. This site outlines everything in plain English. The SBA site contains a wealth of information for entrepreneurs and small business owners.
U.S. Department of Commerce

A thorough overview of the Commerce Department and the organizations under its banner Federal Consumer Information Center
Not only a catalog of free and low-cost federal publications of consumer interest, but also a wealth of information on other subjects such as product recalls, the latest scams and frauds, and more.
Financial Links
Small Business Accounting Software from Intuit.
The Internet leader in software downloads and reviews. Software for every user, Windows, Macintosh, PDAs, Unix, Linux and more.
C/Net Software
This is a huge search engine giving access to hundreds of thousands of programs plus demos, drivers, upgrades and patches.
A C/Net affiliated site offering shareware and freeware programs to download, including software, music, and games.