Does the Method of Tax Filing Change IRS Audit Potential?

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Will that be a Paper or Electronic Tax Return?

[By Dr. David Edward Marcinko MBA CMP™]

dr-david-marcinko5I’ve prepared and filed personal, medical practice as well as PC, S and C corporate tax returns for many years now. I bought my first computer in 1988, participated on dial-up bulletin boards with modem soon thereafter, and have been on the internet since 1995.

But, I do to have a definitive answer to this question.

Two Competing Theories

Some CPAs suggest filing the old-school way if you’re worried about an audit. Why? Paper filing means more work for the IRS to access all the information in your return. Others disagree:

Philosophy in Favor of Paper Returns

Some suggest that a paper tax return might reduce your chance of an audit because the IRS must transcribe your information into a computer by hand. The IRS does not transfer all of the information in your return as a result of the prohibitive cost of transcribing returns. When you file a return electronically, a computer instantly analyzes your return for errors and discrepancies.


Philosophy in Favor of Electronic Returns

Filing an electron tax return reduces the number of math mistakes on your return and the chance that the IRS makes a mistake when it transfers data by hand. Overall, electronic returns contain fewer errors than paper returns which increase the chance of audits. Also, the IRS may perform an automatic audit when its electronic scanning system cannot read your handwriting.




Remember, your duty as a taxpayer is to be truthful and accurate, but you don’t have to make it easy for the IRS.


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7 Responses

  1. Tax Audits,

    Many thanks for easing my mind…somewhat.

    Dr. Dee


  2. Filing Extensions

    No one knows for sure what triggers an audit. Yet, according to, many financial professionals and accountants suspect the Internal Revenue Service has an “audit quota” which begins to fill around mid-April.

    Thus, if you file an extension, a large percent of the “audit quota” may be filled, making your chance of an audit less likely later than had you filed on time.

    Regardless of the quota, there’s little evidence that filing an extension will increase the chance of being audited.



  3. Tax Payers

    Over 70 million folks do not pay income taxes. This represents about 45% of the total US population. And, Obama paid only 19.1 percent.

    Tax Freedom Day this year is April 21st, 2014.



  4. Ex-U.S. defense secretary knows accuracy of his tax return is unknown

    I love this guy.



  5. Audits

    The odds are pretty low that your tax return will be singled out for review. The Internal Revenue Service, short on personnel and funding, audited only 0.86% of all individual returns in 2014. The audit rate in 2015 has fallen to 0.84%

    Cherry CPA


  6. Does the Method of Tax Filing Change IRS Audit Potential? In 2020!

    Dr. David E. Marcinko MBA


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