Date
TAX FILE MEMORANDUM
FROM: Jane Doe
SUBJECT: Ken and Mary Jane Blough’s Itemized Deduction
Today I talked with the Bloughs concerning their itemized deductions. They claimed itemized
deductions equal to the amounts that represents the average claimed by other taxpayers in their
income bracket.
FACTS The Blough’s income in the year of question was $75,000. Because their record-keeping
habits are poor, they felt justified in claiming itemized deductions equal to the amounts that
represent the average claimed by other taxpayers in their income bracket. These averages are
calculated and reported by the IRS annually based on actual returns filed in an earlier year.
ISSUE The IRS is asking for documentation in support of the itemized deductions the Bloughs
claimed on a recent tax return.
CONCLUSION Ken and Mary Jane need to keep all of their receipts as proof when they claim
itemized deductions. Keeping good records during the calendar year helps to maximize tax
deductions. If they cannot improve their record-keeping habits, they should consider
standardized deductions because it requires less time and effort. Taxpayers with low tax-
deductible items can use the standard deduction without fear of problems. It is easy and saves the
