ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Tax Audit - You May Have Inadvertently Asked For One

Updated on December 17, 2011

The term "IRS Audit" is a word that no one wants to here. In fact, most people will prepare their taxes in an overly conservative manner in order to ever be audited. While every tax payer should take every legal deduction afforded to them, many do not simply out of fear of being audited.

Sandy Botkin who is an authority in taxes being both a CPA and Tax Attorney states that this is a strategy of the IRS to force compliance. Over paying your taxes is not a smart thing, but I think we can all understand why a person would do this. The horror stories that we have all heard are terrible.

But what if I told you that you may have initiated an audit. A quite little audit that you didn't even know about. Would you do this knowingly? If you were told that the decision you were about to make was going to cause the IRS to look at your tax return more closely do you think it would affect your decisions?

I am sure that most people would at least pay attention too what they were doing if they knew they were inviting the IRS to look at their tax return. Yet thousands of people every month do this.

Right now in the United States many procedures are being put into place to "catch" people not paying all their taxes. State governments are targeting internet sales in order to get "their" sales tax. In fact, I recently heard of a woman who was buying cigarettes over the internet but not paying State sales tax. The State, through their various ways, caught wind of it and sent her a bill for several thousands of dollars. The first thing you should be aware of is that government agencies are now communicating more then ever.

For example, there are many people operating small businesses to generate some extra cash, but do not have a city license. They file their taxes and show their income and expenses, but don't want to pay the extra fees that their city wants to charge them. Cities are now getting a list of people who file schedule C's in their zip code and the city is cross checking it with their business licenses. If you are one of these expect a letter in the mail from your city.

What is this decision that is the topic of this HUB? It's actually a very common decision that many of us have made many times. When you or I get a mortgage or refinance an existing mortgage we will typically sign a form stating that your income can be verified. What you may not know is that the mortgage lender sends your submitted tax return for obtaining a mortgage to the IRS to be compared to your filed tax return. During your loan process you have invited the IRS to look at your income and tax returns so that they can see if you paid taxes on all of your income. Nice isn't it?

First of all let me say that everyone SHOULD file their tax return honestly. Personally, I disagree with the majority of how the USA taxes, but this is my country and I believe that we should all abide by the laws of the land. Secondly, you should not lie when you obtain a loan. I believe that this is in your best interest. Qualifying for a loan that you don't qualify for is only setting yourself up for disaster. But having said that you should also be aware that when you do get a mortgage or refinance your existing mortgage you are inviting a peek at your financials.


    0 of 8192 characters used
    Post Comment

    • HomeEnergy profile image


      7 years ago from California

      The western world tax system (the US tax system included) is what I may call a "reverse fish net". The big fishes escape the net, the small fishes are caught.

      Impossible though to implement such a thing in a real-life fish net...

    • Deborah-Diane profile image


      7 years ago from Orange County, California

      Very thoughtful information that could help many people avoid a tax audit!


    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at:

    Show Details
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the or domains, for performance and efficiency reasons. (Privacy Policy)
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)