Question

Campbell's tax return was audited because she failed to report interest she earned on her tax return. What IRS audit selection method identified her tax return?

A) Random selection
B) Document perfection program
C) Discriminant function system
D) Information matching program

Answer 1

The IRS likely used the Information matching program to identify the discrepancy in Campbell's tax return, leading to an audit.

Step-by-step explanation:

The IRS audit selection method that identified Campbell's tax return for failing to report interest income is likely the Information matching program. This program systematically compares tax return entries with information reported by banks, employers, and other third parties. If there's a discrepancy between the information reported by these sources and what's on the tax return, the IRS may flag the return for further review, which can lead to an audit.