How does IRS score your tax returns for audit?

E-Filed Returns:

• Electronic data are transmitted to a centralized Submission Processing Center.

• Tax preparation software assigns a unique 14-digit Declaration Control Number to each return.

• A unique Filing Location Code shown as the first two digits distinguishes returns as e-filed.

• An Electronic Management System provides format data verification, data translation, and delivery.

• Federal return is validated and accepted.

• State returns are then made available for retrieval by participating state revenue agencies.

• This explains how state tax agencies learn of your IRS audit. Expect a bill from them later.

Paper-Filed Returns:

• Tax returns are sorted upon arrival at a Service Center.

• Payments included with the returns are removed and deposited.

• Returns and checks are assigned Document Locator Numbers for identification.

• Business returns are tied by Employer Identification Numbers.

• Each return is reviewed for completeness and mathematical accuracy.

• Service Center personnel look for gross or obvious errors and fill in incomplete items.

• A computerized version is forwarded to the computing center in Martinsburg, WV.

After receiving your tax return, the IRS enters your tax data into an IRS master file.

The master file is separated into Individual Master File, Business Master File, and Non-Master Files.

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Victor Santos Sy graduated Cum Laude from UE with a BBA and from Indiana State University with an MBA. Vic worked with SyCip, Gorres, Velayo (SGV – Andersen Consulting) and Ernst & Young before establishing Sy Accountancy Corporation in Pasadena, California.

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He has 50 years of experience in defending taxpayers audited by the IRS, FTB, EDD, BOE and other governmental agencies.  He is publishing a book on his expertise – “HOW TO AVOID OR SURVIVE IRS AUDITS.” Our readers may inquire about the book or email tax questions at

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