Tax Tip: How to Avoid Getting Audited

iStock/ThinkstockWith Tax Day looming, many experts advise holding onto tax filings dating back at least seven years in case the Internal Revenue Service comes calling.

While years of budget cuts have de-fanged the agency to a certain extent, lessening the number of audits as a result, IRS spokesperson Eric Smith says "there is another way that we contact people that actually happens more often that people should be aware of and that's what we call document matching."

When you submit your tax information to the government, you're not the only person doing so. It's also filed by banks and employers. The IRS checks to make sure the paperwork lines up, and the agency could contact you if the income you report doesn't match what your bank or employer reports.

Of course, everybody makes mistakes.

"Maybe you reported it correctly and maybe we missed it, something like that; in other cases people forget the income or didn't report it properly," Smith says.

He suggests using tax preparation software to minimize errors.

"It's an opportunity where people can often pick up mistakes that they would've missed if they hadn't used the software," Smith explains.

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