Quote:
Originally Posted by TougeLove
audits usually only create red flags after a certain dollar amount.
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What you said is only true pre-2001. Before 2002, tax filings were digitized but the digital image was checked by a person. The person would red flag certain items of interest for auditing.
After 2002 the IRS started using software to check tax filings. Every discrepancy is marked with a red flag.
The difference is now that they have everything flagged, they don't have enough manpower to audit everything so they only audit certain items of interest.
So they went from flag-and-audit to flag-everything-maybe-audit-later.