Is it good that I show my 2019 taxable interest income higher than it actually is so that I do very well indeed in case of an IRS audit?

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  • 1 month ago
    Favorite Answer

    You should file a return that is as accurate as you can make it. Only about 1% of tax returns are audited so if yours just passes the smell test you will be OK.

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  • 1 month ago

    No, it's stupid. For two reasons.

    1. You may pay more tax than you will actually owe.

    2. You are making a false statement on an official document. You can be charged with fraud.

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  • 1 month ago

    No. If you show it higher than it actually is, you would do very bad in case of an IRS audit. To do well, you must show it exactly as it actually is.

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  • 1 month ago

    NO. The IRS wants the truth (and has the truth because payers of interest report the payments to the IRS).

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  • Shay
    Lv 7
    1 month ago

    MISTAKES is a great reason to BE AUDITED.

    Reporting the WRONG taxable interest income is a MISTAKE.

    ACCURATE returns will help you do "very well indeed" in case of an IRS audit.

    ACCURATE returns also REDUCES the chances for an IRS audit.

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  • 1 month ago

    No it would be irrelevant.

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  • 1 month ago

    No. It is good to report what it actually is.

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  • Eva
    Lv 7
    1 month ago

    That would be foolish. It won't help you in the event of an audit. They're not going to overlook something just because you over-reported something else. A very small percentage of returns are actually audited.

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  • Judy
    Lv 7
    1 month ago

    no, it's not smart at all. In an audit each item is looked at separately

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  • 1 month ago

    Best way to do well in the event of an IRS audit is to have all your paperwork so that you can document everything they ask for.  I keep my paperwork for 7 years.

    Overstating your interest income would raise a red flag as the IRS computers cross check this with reporting from banks and brokerage houses using your social security number.  You would not only be paying tax on income you did not receive but you would also increase the risk of an audit.

    • NA
      Lv 7
      1 month agoReport

      Small amounts are NOT flagged.  This is because the IRS knows that interest isn't reported to them unless it's over $10 in an account.  There are other cases where the interest isn't reported at all.  LARGE amounts, now that could look odd.

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