The IRS has three years to file an audit and generally speaking, one doesn't know if the audit is random or the result of a red flag. When involved in a case, Rob Wood, a tax attorney in San Francisco, California with Wood, LLP, always asks from the auditor what it was that caused the audit.
There are things that people can do, such as 1099 matching and math errors to avoid audits but a lot of it is unknown, says Wood. Wood notes that the normal 3 year statute is only a "normal rule," and there are all sorts of exceptions. He recommends anytime you get a tax notice, to take it to a professional for advice.
For more information on the article Wood has written in Forbes magazine on this, click here. Robert Wood is a tax attorney with Wood, LLP in San Francisco, California and spoke with The Tax Law Channel, an affiliate of The Legal Broadcast Network. The Legal Broadcast Network is a featured network of the Sequence Media Group.