If you make a modest income and try your best to file an honest reckoning of your income and expenses, there is very little chance that you will attract the attention of an IRS auditor. According to 2011 numbers, households making less than $200,000 had a one in 98 chance of being audited. The odds were significantly higher for the very wealthy. If you made more than $1 million in 2011, you had a one in eight chance of a friendly follow-up from the IRS [source: Kane].
- Forgetting income – If you are a salaried employee or a self-employed contractor, the IRS receives records of your wages for the year. If your numbers don't match up with the IRS's numbers, that's a red flag.
- "Business" expenses – Don't claim vehicle mileage as a business expense unless you use the car exclusively for business. The same advice goes for a home office. And don't try to write off lavish dinners as entertainment expenses unless you can prove that the main purpose of the meal was to discuss business with clients.
- Huge charitable contributions – If you claim tens of thousands of dollars in charitable contributions but only make a modest income, the IRS will get curious.