Infographic: 2019 Taxes by the Numbers Full Size Version Share | Related Content Tax Deductions You Won't Believe Here are some examples of deductions from the IRS that were permitted and some that were, uh, too creative. What Is a 1035 Exchange? 1035 exchanges provide a way to trade-in an annuity contract or life insurance policy without triggering a tax liability. What If You Get Audited? The chances of an IRS audit aren't that high. And being audited does not necessarily imply that the IRS suspects wrongdoing.