Lola's writeup is for entertainment value only, and not to be taken seriously, especially by people in certain occupations.
The IRS likes to audit people in cash businesses (including tips: hairdresser, waiter or bartender) and certain professionals (doctors, lawyers and accountants).
So, I’m a lawyer. I’m better off leaving the “occupation” line blank, right? Wrong.
Leaving the “occupation” line blank is itself a red flag. See Frederick W. Daily Surviving an IRS Tax Audit, (Nolo Press 1999).
Worse, the IRS has ways of identifying people who are trying to be cute. Occupations are identified not only by the “occupation” line, but also by 1099s issued by payors. For example, if I settle a lawsuit, the insurance company makes out a check to me and my client, and identifies the settlement to the IRS as a payment in connection with a lawsuit. Failure to report that income (or if my numbers don’t match the insurance company’s numbers, which could just be an honest mistake) together with a blank occupation line on my return, would guarantee that if the IRS audits only one in a million taxpayers this year, I will be one of the audited.
So how can you tell if are you at risk? Read the MSSP for your industry (if there is one).
The IRS has special guide for auditing taxpayers in particular industries which the IRS believes are not complying with tax laws, called a Market Segment Specialization Program (MSSP). For lawyers like me, there is an MSSP called “Lawsuit Awards and Settlements”.
MSSPs are fascinating analyses of money flows in particular industries. MSSPs are available at http://www.irs.ustreas.gov.
Surviving an IRS Tax Audit, Chapter excerpt: http://www.nolo.com/lawstore/products/product.cfm/objectID/03BC593B-B5C8-4DE2-AF47B59EDE66B907/sampleChapter/5