So how do you avoid an audit if you're rich?
Here are five things tax experts suggest the wealthy can do to try to prevent being audited.
1. Avoid bad accountants. If your accountant has ever been involved with clients who have been investigated for tax fraud, or has a bad history with the IRS, steer clear. Of course, finding a full audit history of your accountant's clients is nearly impossible. But some accountants can give you a sense of their history with the IRS.
2. Don't use big round numbers. If your return is filled with lots of large, round numbers, the IRS might become suspicious of its validity — especially if those numbers pertain to deductions. Make sure all of the reported figures are as precise as possible.
3. Be wary of big changes in income. Wild swings in reported income from one year to the next are a red flag for the IRS. Some are unavoidable, such as a big, one-time capital gain. But consistency is key.
4. Watch for outliers. The IRS looks for numbers that are much larger or smaller than those for similar returns. If you have a huge deduction or itemization that's outside the normal bounds for your income group, that's a red flag.
5. Refrain from using the word "yacht." It sounds obvious. But accountants say that any return that contains the word "yacht" is almost guaranteed to be audited. The challenge, of course, is what to call the business expense for your 250-foot Feadship. Perhaps "waterborne executive office?"
"Secret Lives of the Super Rich" premieres March 30th at 10:30 p.m. Eastern.