Tax Deductions: Are you playing the audit lottery?

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At my Middleburg, FL office, when new clients come in, I always ask them for copies of prior tax returns to review. Many times, I find that clients have been playing the ‘audit lottery’. The audit lottery, as I like to call it, is when you know a deduction you’re using is sketchy at best, but you take it anyway hoping the IRS won’t notice. You may even convince yourself that it is legitimate since you got your refund as usual and no one said anything.

For example, you heard from your best friend’s mother-in-law that she always writes off her dry cleaning, make up, and manicures because she is a Realtor and must look professional. Alright, I see where she’s going with that idea, but it seems a little sketchy. Perhaps your mechanic writes off a home office because he takes his invoices home from the shop to reconcile his bank account in peace and quiet. He’s working right? Seems legit. Guess what? Those are examples of what is NOT allowed. It doesn’t matter how many years they’ve done it without anyone saying anything. They’re just winning the audit lottery…so far.

The IRS is admittedly short on resources; however, they are not stupid. The law prevails, not creative rationalizations. They will disallow invalid deductions and charge you the tax you owed to begin with PLUS penalties and interest. Is it worth the risk? Picture yourself sitting down across a desk from an IRS auditor and attempting to explain your creative logic on that deduction. Yikes! You are responsible, under penalty of perjury, for the accuracy of every number entered on that tax return. Pro tip: You are still responsible for those numbers even if you pay a tax preparer to do your tax return. It is your responsibility to make a reasonable effort to find a qualified person to do your tax return if you are not able to do it yourself.

It is important when you hear about deductions from friends and family that you run them past a qualified tax professional to see what the real scoop is. Diagnosing your medical issues with the help of Dr. Google is scary enough, don’t try to take tax advice from someone who isn’t a qualified tax professional.

If you have any questions about your tax deductions or any other IRS issue, please contact my Middleburg office at 904-600-3450. 

Angela Yonge
Enrolled Agent
Acorn Bookkeeping & Tax, LLC
904-600-3450


Location: Middleburg, FL 32068, USA

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