They run computer programs to flag missing or anomalous data and then send notices that put an onus on the taxpayers to “explain themselves”, to quote Alice’s caterpillar.
Transcript of my recent call with the IRS asking why they disallowed a clearly lawful deduction;
“I can’t explain myself, I’m afraid, sir’ said the IRS agent , “because I’m not myself, you see.” … “I don’t see,’ said the taxpayer (me)”. ‘I’m afraid I can’t put it more clearly,’ the agent replied very politely, ‘”or I can’t understand it myself to begin with; and taking so many different positions on the same issue in a day is very confusing, even to me” ….