Tyrone claimed a large amount of charitable contributions as a tax deduction relative to taxpayers with similar levels of income. If Tyrone's tax return is chosen for audit because of his large charitable contributions, which audit program likely identified Tyrone's tax return for audit?

Question

Quizplus · Accepted Answer

The DIF (Discriminate Income Function) System is used by the IRS to identify potentially questionable tax returns by comparing them to the norm for taxpayers with similar characteristics. Tyrone's large charitable contributions relative to his income may raise a "red flag" and trigger an audit under the DIF System.

Tyrone Claimed a Large Amount of Charitable Contributions as a Tax