I’ve mentioned (even as recently as yesterday) that the IRS has sophisticated processes to determine who needs to be audited. The algorithms are called DIF and UI DIF. While the IRS explains how and why it does what it does (Publication 556) , the actual formulae are never shared with anyone. Because they would be invitations to cheat- knowing how to tweak the numbers to avoid an audit.

Continue reading What’s the DIF? →

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