CBS Money Watch: “the IRS has a top-secret, obsessively guarded computer program that targets certain tax returns for closer examination. . . . some deductions and credits are more likely to attract the government’s attention than others . If you don’t know about these red flags . . . you might be asking for an audit.” The areas that get special IRS scrutiny are:
- New home credit
- Business car use
- Home office deductions
- A lot of itemized deductions for your income bracket
- Non-cash charitable contributions
- investment income discrepancies
- math error
- new car sales tax deduction
See also “IRS Releases 10-Year Enforcement Data: Business Audits Down, Individual Audits Up,” which contains a chart showing the percentages of IRS enforcement actions for the 2009 fiscal year.
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