Most returns chosen for audit are flagged by an IRS computer program known as the discriminant function system or DIF, in official tax parlance. The actual scoring formula to determine which tax returns are most likely to be in error is a closely guarded secret. But Nath, a Washington, D.C.-area tax attorney, says it's no mystery that the system is designed to screen for returns that could put more money in the government treasury. How do your deductions compare? Tax pros believe one discriminate function component looks at average deduction amounts. This allows IRS examiners to spot inconsistencies, such as a high mortgage interest deduction and low income. Tax specialists at CCH Inc. examined 2001 return statistics, the latest year for which the IRS has complete data, and came up with the following itemized deduction averages. These are for illustrative purposes only and consider filers who claimed a deduction (zero deductions are not factored in). CCH experts note that the IRS takes a dim view of taxpayers who base their claimed deductions on these figures. Income Range $15,000 to $30,000 $30,000 to $50,000 $50,000 to $100,000 $100,000 to $200,000 $200,000 or more Medical expenses $5,616 $5,489 $5,532 $10,780 $35,927 Taxes paid $2,311 3,052 $5,108 $9,713 $38,931 Interest paid $6,406 $6,783 $8,330 $11,817 $23,260 Charitable contributions $1,875 $1,906 $2,429 $3,761 $17,842 What triggers a discriminant function red flag? Higher incomes Income other than basic wages, for example, contract payments Unreported income, such as investment returns Home-based businesses, especially when in addition to salary income, and home office deductions Noncash charitable deductions Large business meal and entertainment deductions Excessive business auto usage Losses from an activity that could be viewed as a hobby rather than a business Large casualty losses Returns claiming the earned income tax credit also catch IRS eyes. The credit was designed as a tax break for lower-income wage earners. The credit's complexity often results in legitimate mistakes on returns. Some filers, however, have been caught making false claims to increase the payment the credit provides. Do Not let fear of an Audit prevent you from taking deductions that are duely yours to deduct.  When dealing with taxation, it's better left to the Professionals to keep you well outside the "RED FLAG" Zone.