Business: Avoiding Those Nasty Tax Audits

Monitor the math, watch the write-offs—or take a low-pay job

A specter is haunting the tens of millions of Americans who are now sitting down to figure out their income taxes for 1977. Of the 88 million people who file income tax returns, more than 2 million will eventually receive a deceptively amiable form letter from the Internal Revenue Service that reads in part: "We are examining your federal income tax return for the above year(s) and find we need additional information." Translation: these taxpayers' returns for 1977—or perhaps as far back as 1975 —will be audited. Two out of three...

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