How does the IRS decide who to audit?

This answer is provided by Mark Misselbeck, CPA, from Levine, Katz, Nannis & Solomon PC in Needham.

Q: What does the IRS typically look for when deciding whether or not to conduct an audit? Is it random?
- Concerned taxpayer, Boston

A: There is no particular rule that we are aware of, other than if the IRS develops information from one audit that indicates that income may not have been reported by another taxpayer, they will audit that other taxpayer, or they have received information from someone that another taxpayer is "cheating" on their return.

The IRS has developed "model" returns for different taxpayers. Depending on your filing status, family composition, income level and where you live, your return information will be compared with your comparable "model" and, if there are significant variances from than "norm" for your actual return reporting, the probability of an audit of your return increases as the variance increases.