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There are different reasons why a person might be audited by the IRS, surprisingly a person can even be audited if someone calls the IRS and makes a false claim against you.

The good news is, basically, the odds that your return will be audited is determined by the DIF also known as the discriminant function formula. This is a mathematical formula that looks at different lines on your tax returns and assigns a numerical value according to the possibility or error. The following are a few ideas to help keep your number lower.

Try to keep within your averages - There is a table of average deductions that the IRS goes by, listing income in the thousands and what the average deduction for that group of income should be, and if you exceed that average your chances of being audited are greater.

Make sure you use the right forms, claim all your income and save your receipts - Other things that can trigger an audit is what return you are filing, your profession, the amount of income that you earn, what you are claiming, or if your expenses are greater than your income.

For example, one year instead of taking the standard deduction you file a Schedule A with more than the average amount of deductions or you are claiming a high cash donation to charity compared to your income reported.

Make sure you double check your W-2's and 1099's - Errors on your return can also cause an audit; for example, your W-2 or 1099 does not match what your employer or contractor submitted.

Save your paperwork and put down your explanations - Another way that might trigger an audit is if you were to claim business or personal transactions with no explanations, or have tax-shelter losses.

Finally, make sure that all of your personal information is correct, your return looks neat, you can clearly read it, you have included explanations where needed, your income is correctly stated, you have used the correct forms, and you have not claimed more deductions then income. The good news is, doing these things should help reduce the odds of you being audited.

Works cited:

"Professional Edition J.K. Lasser's Your Income Tax 2007" Prepared by the J.K. Lasser Institute John Wiley & Sons, Inc. Copyright 2006

Learn more about this author, Jeanie Pitner.
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