Do legitimate deductions increase the probability of an audit?

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

Q: By taking legitimate deductions (e.g. for clothes donated to goodwill, etc.) in addition to the standard deductions that everyone gets, would I be increasing the probability of an audit? --Dave, Wilmington

A: There are no "deductions" that everyone gets, in addition to charitable donations.

If you claim the standard deduction provided under the tax laws, you are giving up all other deductions that you could claim by itemizing them on Schedule A of the long Form 1040 return, which deductions include charitable donations. If you choose to itemize your deductions, they would need to exceed; $ 9,500 (on a married, filing joint return); $ 7,000 (for heads of household status); or $ 4,750 (for either single or married, filing separately) to make it worth your while to do that, since these are the standard deduction levels for 2003 that are allowed in place of itemized deductions.

The audit probability is determined based on how far out of line (usually on the high side) of the IRS' model returns for your filing status, income level, locale and number of dependents (which information is closely guarded by the IRS). There should be no problem if you have the documentation of your deductions (a letter of acknowledgment for donations of $ 250 or more at one time) or receipts for lesser donations of clothing, etc., provided the valuation of such donations is reasonable. There are special documentation requirements for donations of property (other than listed securities) of $ 5,000 or more (whether single items or similar groups of items) - see Form 8283 and its instructions (available from the IRS at 800-829-3676 or at their web site www.irs.gov) for the requirements for such donations.