Does filing early or on time lessen or increase your chances for audit? If you file on extension, is the IRS more or less likely to audit you?

In a BLR webinar titled "Tax Savings for Small Businesses: How to Maximize Valuable Deductions and Avoid IRS Overpayments," Brian C. Greenberg, CPA, outlined that this entire issue is a myth. Filing in a timely manner or using an extension does not change your likelihood of being audited at all.

In fact, holding off filing a return to avoid being audited can have some undesirable side effects. Holding off actually keeps "open" your return longer than it normally would be. Why wait and have it hanging over your head? Greenberg advises to get it done in a timely manner and move on with your life.

Another issue is the issue of penalties. If you owe money and you file an extension, the extension is irrelevant for your money owed; the money owed is still due on April 15th. Additionally, the IRS is really cracking down on penalties for corporate and partnership returns. The bottom line is to file timely, and do it electronically so you get a receipt and don't have to worry about the file getting lost.

Brian C. Greenberg, CPA, is the founder of Brian C. Greenberg & Associates, LLC, a New Jersey-based tax accounting firm. (www.greenbergcpa.com) With 30 years of experience as an accountant, Greenberg has developed a diversified background to service his clients’ needs. Greenberg has extensive media experience both nationally and locally, commentating for the Wall Street Journal Report, Fox Business News, Bloomberg News, Forbes TV, and local TV in Philadelphia with ABC, NBC, and Fox. He has appeared as an analyst on the economy, stock market, taxes, budget issues, school issues, and more.

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