They pull some at random, but the system is set up to flag a return if the numbers are odd. Also if you have a math error, it will be pulled and looked at by hand( never a good thing)
Most people like to get a little creative, when it comes to deductions. The most common ofenders are home offices and travel( cars/trips) If you have a log for your car, your fine, if not your SOL. Same with trips, if you can prove that trip was biz related, your fine...
Having a mother that was a lead auditor for FTB( CAs IRS) I've heard some storys that will crack you up.
The last few years they have a had a hard on for cell phone bills so don't claim 100% of it.