Some people wonder if they submit the IRS form 8275 with their tax return that they will be subjected to an increased risk of audit, but this isn’t necessarily the case. There isn’t anything in the tax code that requires the IRS to audit returns based on the inclusion of this form.
The form 8275 is used when there is something in the tax return that needs to be clarified to the IRS. In the simplest of terms, this form is used to reassure the IRS that specific points in your tax return do comply with the tax code.
If you need to file form 8275 based on any factor, including a tax shelter, be sure that you are turning in the appropriate form. There is a similar one, form 8275-R, that has to do with situations that don’t comply with the tax code. Filing that form is more likely going to trigger an audit of the return, even if the contents show that you are actually in compliance and just turned in the incorrect form.
One mistake that some individuals make on the disclosure form is that they aren’t concise about what’s going on. Some returns include several pages of information and may include documents and other attachments. Making sure that the information in the disclosure is concise and accurate is all you must do. The IRS can also ask for additional information if there is a need for it.
Individuals and businesses who have complex tax returns should always consider working with a professional. This can help you to ensure that you’re working within the confines of the law. If there is ever a question or accusation made against the return, be prepared to take swift action to show that you did comply with the law.