QuestionJune 4, 2025

Which of the following significantly increases your chance of being audited by the IRS? a. Shared personal and business use of a vehicle b. Reported foreign bank account c. Filing an amended return d. Higher-than-average deductions

Which of the following significantly increases your chance of being audited by the IRS? a. Shared personal and business use of a vehicle b. Reported foreign bank account c. Filing an amended return d. Higher-than-average deductions
Which of the following significantly increases your chance of being audited by the IRS?
a. Shared personal and business use of a vehicle
b. Reported foreign bank account
c. Filing an amended return
d. Higher-than-average deductions

Solution
4.2(332 votes)

Answer

b. Reported foreign bank account Explanation 1. Identify factors increasing audit risk Certain actions or reports can increase audit risk, such as reporting foreign bank accounts and higher-than-average deductions. 2. Analyze each option a. Shared personal and business use of a vehicle: Common but not a significant audit trigger. b. Reported foreign bank account: Significant audit trigger due to IRS scrutiny on foreign assets. c. Filing an amended return: May increase audit risk but less than foreign accounts. d. Higher-than-average deductions: Significant audit trigger due to potential discrepancies.

Explanation

1. Identify factors increasing audit risk<br /> Certain actions or reports can increase audit risk, such as reporting foreign bank accounts and higher-than-average deductions.<br /><br />2. Analyze each option<br /> a. Shared personal and business use of a vehicle: Common but not a significant audit trigger.<br /> b. Reported foreign bank account: Significant audit trigger due to IRS scrutiny on foreign assets.<br /> c. Filing an amended return: May increase audit risk but less than foreign accounts.<br /> d. Higher-than-average deductions: Significant audit trigger due to potential discrepancies.
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