hy me? You just got the invitation to a "party" that you hoped you'd never attend - an IRS audit.

The "why me?" is not always an easy question to answer. Few audits are generated by mathematical mistakes alone. The Internal Revenue Service computer automatically corrects mathematical errors and mistakes where you have claimed deductions that exceed the limits set by the tax code itself, such as the 7.5 percent adjusted gross income limitation on medical deductions. However, too many of these kinds of errors indicate a sloppy return that may lead to a full audit. So my first rule of audit minimization is to check your arithmetic. While it may seem obvious, let's not give the IRS any additional reasons to look at your return.

Most returns are selected for audit on the basis of a computer-generated program that compares your deductions to others in your income bracket and weights the differences. This secret IRS formula, called the DIF Score, is used to select returns with the highest probability of generating additional audit revenue.

For example, a taxpayer with a $50,000 salary would rarely have $10,000 in charitable contributions. This doesn't mean that if you have only $50,000 in income and actually have $10,000 in charitable contributions you shouldn't claim those deductions. It only means that if that is the case, you should be prepared to prove those deductions. The DIF formula considers not only your income and deductions, but where you live, the size of your family and your profession as well. Rarely will a family of five living in the Hamptons have an income of $30,000 or less. It may happen, but if it does, the IRS will want to know how.

How you generate your income may increase your chances of being audited. First, recognize that if you are self-employed, you have more opportunity to either "hide" your income or "create" deductions by converting personal expenses into business expenses. If so, be prepared to substantiate your expenditures as deductible expenses. The IRS is aware of the myriad "business vehicles" that go away to college every September, and the probability of your being audited is enhanced.

Your profession itself may increase your chance of being audited. The IRS has specific audit programs aimed at specific professions. For example, because they receive much of their income in cash, people who work in the gaming industry, waiters and even doctors are prime audit targets. The more cash you receive and the higher your income potential, the more likely the IRS is to find additional tax dollars by reviewing your return.

In the audit itself, the IRS will focus on those items where taxpayers have historically failed to keep the required substantiation. Traditionally, auto, travel, meals and entertainment have been the areas most audited. To deduct auto expenses, you must establish the percent of business use as well as the actual expenses incurred. I ask my clients to keep a mini-cassette recorder in their car to record the business mileage and purpose. Kept contemporaneously, it is acceptable as sufficient substantiation of business use. Alternatively, a written diary of miles used for business would also be accepted.

With respect to meals and entertainment, you must have a receipt for all expenditures of $75 or more. The rule is simple - no receipt, no deduction. If the expense is less than $75, a diary notation is sufficient. However, both the receipt and the diary notation must have all of the following information: 1) the amount paid; 2) the name/location of the restaurant/entertainment facility; 3) the person you entertained; 4) that person's business relationship with you; and 5) the business discussion related to the entertainment.

Unless you talk business before, during or after the meal, your deduction won't be allowed. With any and all expenses, deductions will be more easily allowed if you have a piece of paper to back them up.

My next three rules for audit survival are substantiate, substantiate and substantiate. Don't come in with a carton of miscellaneous receipts. However, the more "organized" your receipts and the more paper you produce, the easier it is for an IRS agent to conclude that you are organized, have full substantiation and owe no additional taxes.

One more point about how you're selected for an audit: The IRS computer selects many returns for audit on a random basis. Your income, deductions or where you live are irrelevant. Your number just came up - you won the audit lottery. A student making $3,000 a year is just as likely to be selected as an accountant making $300,000. You just got "lucky."

However, there are things you can do to decrease your "luck." Remember that the IRS can audit you for three years after you file your return. In reality however, most returns are audited within 18 months of filing. This gives the IRS time to do the review and request the appropriate substantiation before the statute of limitations (usually the three-year period) ends. Once the statute has run out, the IRS normally cannot audit your return and your expenses are insulated from examination. It has been claimed that the later you file, the less likely it is the IRS will pick your return to be examined. The IRS still insists that agents are not graded or evaluated on the amount of money they collect until congressional testimony reveals - surprise - that policy is not the same as practice.

I recommend that you have your return prepared early. If you have a big refund and are unconcerned with audit issues, file early and get your money back. If you have taxes due, and no penalty for underpayment, don't file until April 15. Don't ever pay a federal tax bill before it is due. It's an interest-free loan to the IRS.

On the other hand, if you are concerned about a potential audit, never file until the last minute. It won't hurt and can only decrease your chances of being selected.

Some advisers have suggested taking advantage of the IRS's own bureaucracy to reduce your chances for an audit. Within the IRS, the audit division is completely separate from the collection division. Aggressive advisers have suggested to clients who are strong audit candidates to actually underpay their taxes by, say $10, and refuse to pay the balance.

Your file will be thrown into collections. There is no question of your owing the money; the only issue is collecting it from you. You will receive monthly letters generated by the IRS computers and threats of liens and potentially a levy on your wages or assets. The interest and penalties will accrue, potentially to twice the original $10 that you owe. But all of this takes time - time that your return is in collections and not available for the audit division.

While I do not normally recommend this kind of position, the diversion of your return into collections does squeeze the time frame when an auditor can get to your return. Remember, unless the IRS can prove fraud (and they have the burden of proof with fraud), the statute of limitations runs out in three years. Once the three years are up, they lack the statutory authority to audit that year's return. The longer you can keep the return in collections, the better your chance of avoiding an audit. This is a technique, however, that should be kept in reserve for when you need it. It surely would not be appropriate for an annual strategy. One little cautionary note: You can assume that since tax advisers know about this little strategy, the IRS does, too. And if you're caught trying to play this little game, the results could be ugly.

What I do highly recommend is the use of pre-audit strategies. For example, if you have a huge medical deduction for a year that you feel would increase your chances of being audited, attach copies of your medical bills to your return.

Alternatively, if you made an unusually large charitable contribution, attach a copy of the check or receipts to your return. The IRS computer will still kick out your return, but when it is looked at by a real person, the reviewer will recognize that you know the rules. It may actually reduce your odds of a full audit.