How the IRS scores tax returns for audit.

The higher the score, the more likelihood that you’ll be chosen for audit.

• Scoring System: The IRS uses a Discriminant Function System (DIF) to determine returns that are most likely to generate additional revenue for the government. Although the scoring is secret, it’s based on two factors: Total Positive Income and Total Gross Receipts. A return with a high DIF score is more likely to be audited, since such a score indicates a greater probability that additional revenue will be generated. The DIF score is based on statistical profiles developed through the National Research Program (NRP).
  
  
• National Research Program (NRP): The IRS developed a new NRP to replace the old Taxpayer Compliance Measurement Program (TCMP). NRP developed new audit criteria from a stratified sample of approximately 50,000 individual audits. Data obtained from the NRP audits are being used to score returns for audit.
  
  
• Exceeding National Averages Attract Audits: Taking deductions that exceed national averages increases your audit score. TIP: If you exceed the averages, opt out of e-file. Instead, paper file and attach explanation of unusual amounts such as big donations or large medical bills.
  
  
• Other Sources of Audits: Audits also come from matching programs, return preparer programs, claims for refund, or separate related-party audits.