Selection for an audit does not always suggest there’s a problem. The IRS uses several different methods:
- Random selection and computer screening - sometimes returns are selected based solely on a statistical formula. They compare your tax return against “norms” for similar returns. They develop these “norms” from audits of a statistically valid random sample of returns, as part of the National Research Program the IRS conducts. The IRS uses this program to update return selection information.
- Related examinations – They may select your returns when they involve issues or transactions with other taxpayers, such as business partners or investors, whose returns were selected for audit.
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