Which tax-return items get IRS scrutiny?

If Americans are worried about being audited this tax season, they aren't showing it. According to a telephone poll taken for Money magazine, 3 out of 4 taxpayers say they aren't too concerned about the IRS knocking on their door. Perhaps that's because the odds of an audit are about 202 to 1.

You can lengthen those odds by handling certain aspects of your return with extra care. Tax specialist H&R Block highlights the following five items that the IRS watches carefully:

Earned-income credit. The IRS recently estimated that 42.5 percent of all returns with this credit claimed more than the correct amount.

Miscellaneous income. Any entry of this type raises questions. Be sure to attach a statement to your return explaining the source of this income.

Home-office deductions. Many taxpayers make mistakes figuring the correct amount or are not entitled to take them.

Self-employment expenses. Claims for work-related meals and travel increase the chance of an audit, so keep detailed records and receipts.

Itemized deductions. The IRS looks at the relationship between income and deductions. For example, the greater the percentage of income you claim to have donated to charity, the greater the likelihood the IRS will pull your return.

(c) Copyright 2001. The Christian Science Monitor

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