As a former IRS agent the number one question I am asked is, Why does IRS audit a tax return?


While there are variety of reasons the IRS audit tax returns the chief reason is because of the DIF score.

Every return next file goes through an audit and every return is rated/ranked by the Internal Revenue Service.

The chief reason your tax return is audited is because of the DIF.

The DIF process has already audited more tax returns than any other of the IRS processes.

So what is the DIF ?  Discriminate Function (DIF) Discriminate Function (DIF)


It is a mathematical technique used to classify income tax returns as to Examination potential. Under this concept, formulas are developed based on available data and are programmed into the computer to classify returns by assigning weights to certain basic return characteristics.

These weights are added together to obtain a composite score for each return processed. This score is used to rank the returns in numerical sequence (highest to lowest). The higher the score, the higher the probability of significant tax change.

The highest scored returns are made available to Examination upon request.

The DIF-system involves computer classification to mathematically determine the Examination potential of returns, and manual screening to set the scope of examinations and to select needed workload.




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Mr. Michael D. Sullivan

Michael D. Sullivan is the founder of MD Sullivan Tax Group. He had a distinguished career with the Internal Revenue Service for 10 years. As a veteran IRS Revenue Officer / Agent, he served as an Offer in Compromise Tax Specialist and Large Dollar Case Specialist.

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