by: Kelly Phillips Erb
“Worried about an IRS audit? Avoid what’s called a red flag. That’s something the IRS always looks for. For example, say you have some money left in your bank account after paying taxes. That’s a red flag.”
While Leno might not have it exactly right, he is on to something: The IRS does look for red flags when selecting a return for audit. Their methodology, however, is a little more sophisticated than what the comedian suggests. While there’s no foolproof way to escape an audit, here are some tips for keeping your return from being flagged: