10 Myths About IRS Audits

Filing for Many Credits and Deductions Increases Your Audit Odds
Many people deduct clothing donations on their taxes; they need to be wary of not overestimating their value to lessen their chances of an audit. Tetra Images/Getty Images

If you've filed for several deductions or credits legally, then you should be fine. Credits and deductions are there for the purpose of relieving the burden of a hefty payment.

If you fraudulently filed for certain deductions or credits, such as the aforementioned earned income tax credit, that's when you run into problems. Especially since the IRS has caught on to the fact that millions of bogus claims for this credit exist.

Another typical problem taxpayers run into is overestimating charitable donations. It's common knowledge that you can deduct donations; however, what most people don't know is that they need to itemize the donations [source: IRS]. Additionally, overestimating the value of these charitable donations can lead to an audit.

The solution is to be as honest as possible when it comes to deductions and credits. Don't try and cheat the IRS and it won't audit you. And if agents show up, have the backup proof.