Does Filing a Schedule C Make Me the Target of an Audit?

For the fiscal year 2009, about one out of every 100 taxpayers were chosen for an audit. In terms of numbers, 1.4 million taxpayers were selected for either a correspondence or a personal audit. Statistically, those are pretty good odds for taxpayers.



While there's no magic formula to determine what can trigger an audit and what doesn't, there are some patterns that seem to be pervasive. One pattern that causes alarm among small business owners is the frequency of audits of taxpayers who file a Schedule C. So, does filing a Schedule C make you an audit target? Well, yes and no.