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10 Tips on How to Avoid a Tax Audit – Part 2 –

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How to avoid a tax audit, here is the second part of our article. After having given you the first 5 factors that can lead to a tax audit: denunciation, late or incomplete submission of your tax statement, frequentation of refined institutions and public display of wealth, here are 5 other points to help you avoid a tax inspection.

6- Too many tax deductions

You may be accustomed to hunt, in good faith, for tax exemptions in order to deduct the maximum on your statement. You could regret it because the more exemptions you declare, the more your statement will be carefully studied and this may lead to a tax audit. Large exemptions in the real estate sector are particularly treated with special attention.

7- The transmission of complete statements

In contrast to the general idea, a complete declaration of 30 pages, with maint details, will draw attention to you.

You give food for thought and the tax administration may be tempted to taste all of it. You increase the risk of making a small error that could result in a complete tax check.

8- Paying commissions or fees

You could pay someone who brought you a very lucrative contract, but this may attract the attention of tax services, especially if that person is domiciled abroad. The tax services may actually estimate that this commission does not correspond to a real service, levy a tax on this sum (considered as unpaid profits), and submit you to a tax audit.

9- Take a tour of the world

Travel agencies are also an excellent source of information for the tax administrations. You could well undergo a fiscal control  if you leave on a tour of the world and your income does not justify the expenditure (even if it cost you 10 years of savings). Sanctions could follow.

10- Cash deposits on your bank account

Deposits of cash considered “suspect” may be the subject of an alert from your bank to the tax administration. Avoid depositing large sums of cash in your bank. Keep it under your mattress and deposit it in your bank gradually.

Basically, to avoid a tax audit, it is important to limit any demonstration of wealth.

 

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