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10 Myths About IRS Audits

        Money | Taxes

1
If I Got a Refund, I'm in the Clear
Go ahead: Put a down payment on your private plane with your tax refund. Just remember that getting the check doesn't mean you can never be audited for that return. Kiyoshi Takahase segundo/Hemera/Thinkstock
Go ahead: Put a down payment on your private plane with your tax refund. Just remember that getting the check doesn't mean you can never be audited for that return. Kiyoshi Takahase segundo/Hemera/Thinkstock

Sorry to burst your bubble, but this is completely false. If you've received a refund, all that means is that the IRS has agreed with your calculations. Getting a refund has absolutely no bearing on whether or not you will get audited later.

In fact, determining who gets audited happens months later. After your refund is paid, the IRS compares it to a model through a computer check. A computer program called the Discriminant Inventory Function System (DIF) assigns a numeric score to each return. If your score is high, then there's a good chance you may be audited [source:IRS].

Your return may also be selected for audit based off information sent to the IRS by third parties. For instance if the income you reported does not match the information on a 1099 or W-2 form, you have a higher chance of being audited [source:IRS].

And let's also remember the IRS has up to three years, and in some cases six years, to audit you.

These are just a few of the most common myths you'll hear about audits during the tax season. Moral of the story: Don't cheat the IRS, and you'll have nothing to worry about if you do happen to get audited.


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