What does the IRS look for to audit someone and who is most liking to get audited?

Answer 1

The list is classified.

However, there are "red flags." uninsured casualty losses are sometimes looked at,
out of line business deductions that aren't reimbursed, a lot of dependents, spending out of proportion to income, losses from self-employment, especially what the person also has a full time job. High amounts of contribution.

The key: if you believe it is legitimate, deduct it, but have your facts and figures together if challenged,

If you are prepard for an audit, so much better. Often, they will just nbeed you to verify someting, you do, and you've outta there.

Answer 2

IRS looks for numerious deductions. Example - you make 50,000 and you are not going to give 1/2 away to a church.

Most people who are audited for deductions are those who make well over 100 grand a year. The ones most likely to get audited is a business who is in the red with a huge amount of deductions.

Answer 3

They don't normally go after just a few dollars via an audit, but they would expect the tax to be paid. It has to be so much money and questionable circumstances before it attracts their attention and an audit is considered.

Answer 4

The IRS computers are programmed to kick out suspicious returns--those that claim excessive deductions, etc. Every entry is tied statistically to other entries. For example, if you claim a mortgage deduction for your home that is 80% of your income, they know that something is suspicious--that you are either not reporting all your income or something is amiss.

Answer 5

IRS looks for anything that statistically looks out of wack. For example, you made $40K in salary, but made a donation for $30K. I mean how many people donate 75% of their annual income each year. Although this could be completely legit, but it certainly raise a red flag for an investigation.