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Filed tax returns are also subjected to an evaluation called the UIDIF, or the Unreported Income Discriminant Index Function System. This evaluation involves the analysis of tax returns based on a series of factors to determine a tax return's potential for unreported income. Returns that are found to have a high UIDIF score (. the likelihood of unreported income) and a high DIF score may be selected for examination. The IRS formulas used to calculated UDIF are secret, but it is commonly thought that the IRS uses statistical comparisons between returns to determine UIDIF potential. [7]

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