Economic-reality factors are considered by the IRS in selection of returns for audit only where it has some other evidence that the taxpayer has over reported taxable income for the year.

Question

Quizplus · Accepted Answer

Economic-reality factors are considered by the IRS in the selection of returns for audit to determine if the taxpayer has underreported income or overstated deductions, not just when there is evidence of overreported income.

Economic-Reality Factors Are Considered by the IRS in Selection of Returns