What Actually Triggers an IRS Audit and What Doesn’t

Episode Summary: 
Delve into the intricacies of IRS audits with Lawrence T. Ullmann, a seasoned professional with insights from his IRS and private practice experience. Learn about audit triggers, selection processes, and practical tips for audit preparation, offering valuable guidance for navigating tax challenges.

Key Timestamps:
00:00 – Introduction to the episode on IRS audits
00:50 – What is an IRS audit and why does the IRS conduct them?
02:00 – How the IRS actually selects returns for audit (not random)
02:40 – DIF scores and computer algorithms explained
04:00 – Other ways returns get selected (e.g., from vendor audits)
04:50 – Common patterns and discrepancies that trigger audits
05:50 – How income levels affect audit likelihood
06:40 – Claiming legitimate deductions and avoiding unnecessary fear
08:40 – Impact of filing late, amended returns, or cash-based businesses
10:00 – Role of automated systems and human judgment in audits
11:50 – Real-world audit example (vacation home case)
14:10 – First steps if you receive an audit notice
16:05 – Closing remarks and contact information

About the Show:
*Tax Problems Explained* provides expert insights on navigating complex tax issues, offering practical advice and strategies to individuals and businesses facing IRS challenges. Gain valuable knowledge and solutions from professionals in the field.