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 system (Discriminate Function System) is used by the IRS to identify tax returns that are more likely to have errors or discrepancies. It uses an algorithm that assigns each return a score based on various factors, including the level of charitable contributions claimed as a deduction. Returns with scores above a certain threshold are then flagged for audit. Therefore, Tyrone's tax return is likely selected for audit using the DIF system because of his large charitable contributions.

Tyrone Claimed a Large Amount of Charitable Contributions as a Tax