10 Myths About IRS Audits

If You Use an Accountant, You Won't Be Audited
Shannon Philbrick, dressed as the Statue of Liberty, waves a sign at drivers to encourage them to come to Liberty Tax Services to get their taxes done. Most of the tax preparers at places like these are not accountants. © RICK WILKING/Reuters/Corbis

Whether you use an accountant, a tax attorney, an enrolled agent or your own elbow grease to do your taxes has no bearing on the selection process for audit. Audits are generally selected by computer program, and there is no place on the return to indicate what qualifications the preparer possessess.

The selection criteria used for audits is safeguarded by the IRS; however we do know that it's based on certain factors, such as comparing your charitable tax deductions to that of someone with the same salary. Another red flag is filing a Schedule C (profit or loss from a business) or E (profit or loss from rental real estate, royalties and S corporations). People who file these have a greater chance of getting audited. We'll explain why later.

However, not knowing the difference between an accountant and a tax preparer can lead to hot water if you deal with the wrong person.

Many tax preparer services compete on the ability to get you the biggest return possible. The preparers are not accountants and have only minimal training in tax preparation. As a result, they sometimes get a little carried away in trying to get you more money than perhaps you're entitled to [source: Pinola].

Furthermore, fly-by-night tax scam operations are extremely common during tax season, particularly in low-income neighborhoods. These preparers partake in purposeful fraud, and often, people don't understand what is being put on their return.

Therefore, you must use a credible accountant and avoid being blinded by the "We'll get you the biggest refund!" signs.