I’m an honest taxpayer, but I’ve heard that the IRS is increasing the number of audits the agency will perform this year. What is the IRS looking for?
Most returns are selected for audits by an IRS computer-generated program that compares the deductions you are claiming on your return to other returns in your income bracket. To arrive at a Discriminant Function System (DIF) score, the formula also considers where you live, the size of your family, and how your income is earned. For example, if you were to report income of $60,000, live in an exclusive neighborhood with your family of six, and claim $15,000 in mortgage interest, the IRS may want to chat with you.