A tax audit is a procedure used by the IRS to conduct a thorough inspection of a taxpayer's tax return.  The most important thing an airline flight crewmember can do to prevent a tax audit and get through a tax audit without penalties is:

• Be honest - Do not try to write-off expenses that are false or not allowed

• Keep good records - Poor recordkeeping gives many taxpayers a problem during a tax audit

• Don't make mathematical mistakes - Errors in a tax return can trigger IRS audits

If an underpayment is discovered, penalties on the underpaid tax could be around 20%, plus interest on the underpayment could be due.  If the underpayment is due to fraud, a more serious course of action could result bringing the tax penalty up and over 75%.  The most serious cases of fraud or tax evasion could lead to legal trouble, including possible imprisonment.

Airline flight crewmembers can write-off many aviation expenses from their tax returns, but it is possible to go too far.  Certain red-flags can trigger a tax audit.  Good judgment on the behalf of the tax paying airline crewmember is the best practice to avoid IRS tax audits, yet that alone won't necessarily prevent one.  If a taxpayer is audited, it is important to gather tax records and prepare for it.  It might be a good idea to seek the expertise of a CPA or Tax Attorney.

An IRS tax audit can be triggered randomly, or by an error in filing a flight crewmember's tax return.  In recent years, the percentage of taxpayers that were audited was 1% to 2% of the tax paying population.  Some of the situations that might increase the likelihood of an audit are:

• High Income (Greater than $100,000 increases the odds according to many experts)

• Unusually High Deductions (Take the deductions you are entitled to, but stretching deductions beyond what is reasonable can increase the odds of an audit)

• Mathematical Errors (Mistakes on a flight crewmember's tax return can increase the odds of a tax audit)

• High Charitable Contributions (When the amount donated to charity is significantly higher than others in the same tax bracket, a red flag could be triggered by the IRS)

One of the big benefits of using a flight crew tax service like EZCrewTax or a flight crew tax software service like EZPerDiem, is that you get accurate flight crew tax preparation, which reduces your chance of being penalized in an audit.  In fact, no tax return auditted from an EZPerDiem or EZCrewTax client has ever found fault with the methods used by EZPerDiem or EZCrewTax.

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