IRS Tax Audits - How can I avoid them?

by M.E. Hansen, All rights reserved. Do not duplicate without permission

100% Audit Examination

Low IRS audit rates do not mean that your tax return will avoid IRS scrutiny. The IRS officially audited only 1.67% of all personal tax returns in 1997, the most recent year for which numbers are available.

But in reality, on most tax returns 100% of the income and most of the deductions are checked by IRS computers through the IRS's information return matching program.

IRS computers now check the numbers reported for 29 different kinds of income (that includes income from all 1099 forms), and your deductions of state taxes, real estate taxes, and mortgage interest. IRS computers also check your dependency exemptions, both SSA numbers and there matching names. And if the dependent was claimed by someone else or filed a return themselves.

To the extent that your income and deductions fall into these categories, 100% of them are examined whether you are audited or not.

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