Only a small percentage of all the individual tax returns filed each year will be audited. The selection process is done largely by computer models. These were designed by looking at millions of tax returns and developing "norms."

If your tax return has numbers that fall very much outside these norms, your chances of being audited increase. The averages for tax returns have been done by groupings.

Individual Returns are divided into groups based on the type of work you do and the level of Income you report.

Business returns are grouped by the type of business and their geographic location.

If your income is unusually low or your deductions are unusually high for a given year, you should attach an explanation to your tax return. After the computer selects a return for possible audit, a human being examines the return to see if the computer made a proper selection. Your attached documents may keep you from getting contacted by the IRS.

Congress is alarmed by the IRS estimate that about $280 billion is lost to those who cheat on their tax returns. The IRS has been given a larger budget to do more audits.

Three Main Types of IRS Audits

There are three main types of audits done by the Internal Revenue Service.
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