IRS Examination Selection Criteria - John R. Dundon II, Enrolled Agent
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IRS Examination Selection Criteria

IRS Examination Selection Criteria

Your tax return may be examined for any one of a number of reasons, and the exam can take place in any one of a variety of ways, in a variety of locations, and quite frankly without you even knowing about it.  It really is quite remarkable but your return may be selected for examination on the basis of a computer score produced by a computer program called Discriminant Inventory Function System or DIF.  DIF or as I like to call her DIFFY assigns a numeric score to your tax return after it has been processed.  If DIFFY decides your tax return should be selected because of a high score prepare for battle.  Either way the point is that technology allows for that which you report to be scrutinized and placed on a bell curve and selected for future scrutiny.

In addition your tax return may be selected as a result of information received from other sources including newspapers, public records, and individuals.  That’s right if you are not fully tax compliant knowingly or otherwise and if you piss someone off they can report you to the IRS for investigation so be careful who you engage and for what reason.  Similarly if someone is behaving fraudulently to evade US taxes I believe you have a duty to file a report as a US citizen.



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