Who is chosen for an audit is determined by computer formulas, the intuition of IRS sleuths, and campaigns against specific abuses--for example, trusts that hide assets and partnerships from which income isn't reported. Other red flags include home-office deductions, self-employment income, and rental or other business losses.

Chess game. Those facing an audit may be comforted to know that more than half are handled by mail. These typically involve a question or two about a specific item, such as asking for proof of charitable gifts. An audit that requires a face-to-face meeting with an examiner, by contrast, can turn into a chess game of strategy and psychology, which is why many taxpayers may want to seek professional help and skip attending the audit.

San Francisco attorney Frederick Daily, author of Stand Up to the IRS, says delay can be a good tactic because IRS personnel are eager to close cases and any foot-dragging may make them anxious to wrap things up without being too demanding. Another strategy is to signal that you are ready to appeal any rulings, both through the IRS appeals process and in Tax Court. That might lead to a tradeoff--you agree to give in on one disputed deduction, the IRS relents on another--or a proposal by the agency to settle for a portion of the tax.

Even if you are audited, you may be among the few who come out ahead. In recent years, about 1 in 40 filers who undergo relatively routine audits has received tax back after the exam, an average last year of $4,300 on top of any previous refund they might have gotten.

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