The Facts

• As of 2010, the IRS does not have any standing policy or any informal rule that the agency increase the chances of an audit if you declare bankruptcy, according to FindLaw.
  
  

Considerations

• Even if the IRS wanted to, it could not investigate all the 1.5 million people who declare bankruptcy every year. This does not mean, however, that IRS could not use a bankruptcy as a reason to investigate you.
  
  

Tip

• IRS audits are not the only audit you have to worry about. Bankruptcy courts audit one in every 583 individuals who declare bankruptcy--most of those who receive an audit do so because of a red flag, such a transfer of property. This is less than the one percent chance of being audited by the IRS audit.