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Five Tips For Avoiding a Tax Audit

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This story appears in the March 2012 issue of Entrepreneur. Subscribe »

The Tax Man ComethTaxes are a necessary evil--the price we pay for roads, bridges, schools and law enforcement. Audits, on the other hand, feel just plain evil.

In an effort to thwart fraud, the Internal Revenue Service audits about 1 percent of U.S. taxpayers every year. computers are programmed to catch outliers and oddities on returns; any item that falls outside the norm may be flagged so that an IRS employee can review it to see if there's actually a need for an audit. Common red flags include:

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