Tyler, TX (KYTX) -- With less than a month to go before the filing deadline, you want to make sure your tax return experience doesn't turn into a nightmare.
A business owner in the real estate industry, who wanted to hide his identity, shares his experience back in 2006, when a sales tax audit came out of the blue.
"We didn't really have any fear or reservations about it. We invited them in, opened our files to them, and said do what you need to do," a man we'll identify as "Rick" said.
Thinking everything was in order, Rick wasn't prepared for what came next. "They handed us a spreadsheet showing over $200,000 that they wanted us to come up with that they felt we should have charged in sales tax that we didn't," he said.
Rick sought legal help and is still making payments of the agreement of $80,000 today. He says while he's thankful his business survived, being under constant scrutiny is frustrating.
"Now we feel like we've been somewhat blackmailed into being a tax collector beyond what's in statute, because again statute is so vague," Rick said.
Tax experts say small businesses tend to trigger audits. "They can be very grueling, because you really have to have all your I's dotted and T's crossed, and you need to look very organized," Maureen Parkhill, manager at Liberty Tax Service, said.
Most individuals are audited by letter, but some bigger flags will warrant a personal visit.
"People claiming a lot of general deductions that they may have trouble proving is a place where the IRS likes to go. Because they do catch a lot of people who are claiming excess dollar values," Parkhill said.
Another tip is if you give non-cash donations like clothes, to carefully document what you paid for them, especially if you donate more than $500.