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12 tax audit red flags

To avoid catching the attention of the IRS, beware of these tax audit red flags.

Your ex wants revenge

taxes red flags ex revenge

Following messy divorces, many ex-spouses will go to great lengths to get revenge -- some will have even try to wreak havoc on your reputation by contacting the IRS.

John Lieberman, a CPA at Perelson Weiner LLP, said he has heard of people telling the IRS that their ex-spouse laundered money, committed serious financial crimes, underreported income, even owned a brothel.

"[Ex]-spouses love writing letters to the IRS," said Lieberman.

It's not just the ex-wife or husband you have to watch out for. Lieberman said he worked on one case where the mother-in-law told the IRS that her ex-son-in-law was a money launderer.

Sometimes the claims are completely made up, while others are legitimate. And while some people write in anonymously, others divulge their names -- which is required in order to claim a whistleblower reward of 15% to 30% of any extra money collected as a result of their tip.

Have you had a nightmare experience with your taxes? From tax preparer mistakes to audits -- or worse, e-mail to share your story.

Illustrations by Kacy Belew
  @blakeellis3 - Last updated March 21 2013 12:52 PM ET

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