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January 2012

IRS Audit Red Flags: The Dirty Dozen

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Ever wonder why some tax returns are eyeballed by the Internal Revenue Service while most are ignored? The IRS audits only slightly more than 1% of all individual tax returns annually. The agency doesn't have enough personnel and resources to examine each and every tax return filed during a year. So the odds are pretty low that your return will be picked for review. And, of course, the only reason filers should worry about an audit is if they are fudging on their taxes.

Here are 12 red flags that could increase your chances of drawing some unwanted attention:

By Joy Taylor, Assistant Editor, The Kiplinger Tax Letter