How is a return selected for an IRS tax audit?
Normally a tax return is selected for an audit based on a combination of factors such as the amount and type of income and the amount of certain deductions. For example, if you operate a business or have rental property, your chances of being audited are slightly higher. In addition, people who have medical, charitable, or business deductions which are above the norm stand a greater chance of being audited. You should never omit legitimate deductions simply because you’re afraid of being audited. Normally not more than two percent of the population is audited. Even if you don’t take advantage of all the deductions you are allowed, you may still be audited. Since you’re more likely to be audited if you have failed to report some income, you can limit the risk of being audited by accurately reporting all of your income.
