What Even Is A Tax Audit Anyway? Nothing strikes fear into the hearts of an American taxpayer like the word “audit.” But there really is nothing inherently bad about them. An audit is essentially a review and examination of an individual’s, business’s, or organization’s tax records and returns to verify that there are no discrepancies in the numbers. There are a couple of different types of tax audits that are conducted, but more on that in a later blog. Where fear of the dreaded tax audit is concerned, if you have nothing to hide and are completely honest and forthcoming then you have nothing to worry about. If, on the other hand, you have some sketchy deductions, expenses, income information, etc. on your returns, then beware. Because there is something to be afraid of. Luckily, however, tax audits are not as common as you may think. They only really happen to about 1% of the population. And so folks, here they are. The ten most common tax audit red flags to be on the lookout for.