In the "Data Book" covering the 2010 fiscal year—October 1, 2009, through September 30, 2010—the IRS showed that tax audits of individuals increased to approximately 1.1%, 0.1% higher than the rate for the prior year. Of those audits, 21.7% were conducted by revenue agents, tax compliance officers, tax examiners and revenue officer examiners, down from 22.9% in the prior year. The vast majority of the audits—78.3%—were correspondence audits, up from 77.1% in the previous year.

Moral of the story: It is important to stay on your toes. Comply with all the tax law requirements to secure the tax benefits you are legitimately entitled to receive.

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