Does overpaying the IRS mean you won’t be audited?

Some folks believe that if they overpay the IRS, then they won’t risk being audited.  This is a myth and a big mistake that you could end up making!

The IRS isn’t necessarily concerned whether you overpay or pay the correct amount of taxes.  What can trigger an audit is if you are unable to substantiate your deductions, and if you pay less than what you truly owe.  The IRS can (and will) charge you interest and penalties if you underpay in one area.  Yes, even if you overpaid in another area, they will not apply the overpayment to where you underpaid!

It’s bad business to overpay the IRS (knowingly or unknowingly).  The best practice for making yourself “audit proof”, is to keep accurate business records.

 


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