Tax audits are becoming a more common occurrence these days as IRS computer systems are getting more powerful and efficient at detecting problems with tax returns. The IRS has a complex system that matches what taxpayers report on their tax return with what others claim to have paid those individuals (information returns processing system or [...]

There is no definite way to avoid an IRS audit. That being said, if you know the red flags for an audit you can do your best in becoming a victim.
During an audit the IRS is making a determination on whether or not your return(s) is accurate. Most commonly, deductions are looked at closely.
Here are [...]

The recent claim against HP stems from a tax audit that was done for previous years and recently completed. The SEC reported they were getting audited for previous years taxes but it seems that the IRS went further back. Overall, if the IRS rejects HPs claims about how they reported income, the result would lead to another $560 million lost in years to come. Earlier in the year, the IRS was challenging HP for a transaction it made with AIG overseas regarding tax benefits received.