[larrys]

I think it's actually something that will raise your anxiety level even if you are "pretty honest".

Also there are some borderline issues with taxes (and/or self employment or small corp) that can give you problems.[1] (One for example is deducting for a home office, another might be charitable deductions, another might be writing off some auto usage).

Think in terms of what happens when you see the flashing lights of a police officer in back of you. Even if you haven't been speeding you don't automatically think "no problem I didn't do anything wrong" you get anxious thinking there might have been some mistake that you have made.

[1] See the typical business owner isn't Zuck and doesn't have an army of knowledgeable advisers to handle all the details. You are essentially on your own with your accountant.

[mikeash]

I should have phrased that better. You're right, it is a bit frightening. But not on the same level as what we would think of as a real audit (I imagine, haven't had one).