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How to get ready for an IRS audit

from Bloomberg Businessweek

The IRS examined just over 1 percent of all individual tax returns for the 2011 tax year but the self-employed are more likely to be asked to document their returns, says Jackie Perlman, principal tax analyst at the Tax Institute, the research and analysis division of tax prep company H&R Block. Unlike wage earners who receive W-2s from their employers, the self-employed, especially those in cash businesses, are essentially on the honor system when it comes to reporting income. more

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