What Triggers an IRS Audit?

Receiving news that you’re being audited might spoil your day, or quite possibly your next few months. While it may be tempting to ignore the audit notice in hopes of it disappearing, It’s best to deal with it immediately by being compliant with the IRS to avoid facing fees or penalties in the future. Steering clear of certain missteps may prevent your tax form from being flagged to begin with. As a general rule, an honest and accurate tax form is less likely to face IRS scrutiny.

These are some factors that may trigger an audit by the IRS:


While a typo may be an honest mistake, the IRS will not brush this blunder aside. Even if the mistake was not intentional, such an error could result in a fine. Do not simply breeze through your tax return. Review your tax forms thoroughly before submitting them.

Rounding Your Numbers

Most things cost a dollar amount and change. An itemized list of solely whole numbers may arouse suspicion. Instead of rounding your expense estimate up to the nearest hundred, round to the nearest dollar to be more exact.

Failing to Disclose Income

If you earn a salary as an employee and money as an independent contractor, you should be filling out two separate tax forms (W-2 and 1099). Not recording money earned as an independent contractor might come back to bite you. Generally, the IRS will discover the undeclared income if there is a record of it by the hiring party.

High Deductions

You should only be deducting expenses related to your work, and if these items are questioned, you should be able to justify the expense. Additionally, claiming a charitable donation as a deduction that is disproportionate to your income might flag your tax form.

Incorrect Filing Status

Since certain filing statuses result in paying a lower tax, a sudden switch in filing status might attract the IRS’s attention. Similarly, falsely claiming non-existent dependents or claiming credits that you do not qualify for may trigger an investigation.


If you are self-employed, the IRS wants to ensure that you are not exploiting the tax advantages. If your sole proprietorship is not legitimate and makes no real income, the IRS may suspect that you are using your business as a cover to pay fewer taxes.

Corporate Tax Form

The IRS may compare your tax return with that of your employer’s to make sure the numbers add up. If there is a discrepancy between your individual tax return and the corporation’s tax return, the IRS may want an explanation for why the inconsistency exists.

Be truthful on your tax return to avoid any troubles with the IRS in the future. As mentioned above, lying on a tax return is not worth it in the long run and can result in penalties or fines. If you need elaboration on any of these audit triggers or require assistance with filing your tax return, you should consider hiring a tax lawyer to take care of your tax filings for you. K&S Law Group is a law firm specializing in tax law for individuals and businesses alike.

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