Receipts for business expenses under $75.

[Critter-3]

@waltkihm 

Is there a good reason for your posting  to a thread that is more than 3 years old ?  

[waltkihm]

The issue is prevalent no matter how old the post is.

Auditors can be very arbitrary (in the past).

I haven't had a client audited in over 20 years.

I assume that most audits of personal returns report gross income of $M or more.

[kjscheiern]

Don't make assumptions when you don't have all the facts. During the periods when I was audited, I was a struggling entrepreneur (bottom line income less than $10,000 per year). Not making a lot of money, living off savings, selling almost everything I owned to pay my bills. I had documentation for everything and kept detailed records of all transactions. I have no idea why they kept singling me out. The first two times I was audited (and I had representation all 3 times), the IRS auditor looked at all the documentation and returned a "verdict" of "no findings". But the 3rd time, the IRS auditor chose to deny a number of deductions (that had previously been approved in earlier audits). My representative told me that as these were a matter of opinion and as I was still struggling to make money (after several years), I would very likely lose if I appealed and that I risked having my business declared a hobby (even though I had no other means of support). So I was advised to pay the IRS and move on - particularly because I had no money or time to go through an appeals process. The total amount I had to pay was under $8,000. And I had to empty my Roth IRA to do it. To assume that the IRS only audits high income individuals is incorrect. The IRS audits anyone they want to - regardless of their net worth.

[waltkihm]

I used the word "Assume" in the 1st several words of my reply.

You seem to have an abrasive personality...

The author of the books that I suggested searching for (I assume, once again, that I can't use his name) speaks to the 3rd audit on the same issue.

The IRS has a knack of auditing folks when they are down.

Returns are selected for audit per the DIF score.  I have never heard the parameters of the DIF score discussed; it may be the only secret that our country has.  This community could talk for days & weeks on the possibilities of various line items on our 1040s that may tip the scales for an audit.

Good luck.