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Why could you be a target for an IRS audit?

A computer program helps decide which returns should be the focus of an audit.

ATLANTA — Tax season is a bit different this year, but the things you can do to avoid an audit are the same.

The Internal Revenue Service audits less than 1% of all returns each year, but there are several ways your return can make you a target.

 The IRS runs selected returns through its Discriminate Function System, a computer program that gives each return a score. The higher the score, the more likely the return will be targeted for an audit.

“If they see certain areas, they know these are areas that more likely there has been some abuse,” says financial expert Jani Thornton.

The IRS looks for returns that include a lot of business expenses.

“That’s a huge target for the IRS because a lot of times people will inflate expenses to reduce their overall tax income,” says financial expert Andrew Poulos.

Charitable donations might raise a red flag if they seem out-of-line for someone on your income level.

A tax return filled with round numbers could lead to an audit.

“Those are indicative of the fact that those are estimates and not real numbers,” says Thornton. “The IRS is looking for us to be honest and truthful about what we’re reporting.”

Of course, math errors or a return that seems out of whack with other returns you’ve filed could produce an audit.

And as you might expect, the more you make the higher your odds of a call from the IRS.


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