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Five Surefire Ways to Trigger an IRS Audit


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March 17, 2024

Tax season can be a nerve-wracking time for many individuals and businesses with the looming worry of an IRS audit hanging overhead. While the average taxpayer faces a low risk of being audited, certain actions can significantly heighten this risk. In this article, we'll explore effective strategies to steer clear of triggering an IRS audit and discuss tactics to diminish your audit risk.

Understanding the Risk Factors

Income Discrepancies

One of the most common triggers for an IRS audit is discrepancies in reported income. If there are inconsistencies between the income you report on your tax return and the information provided by your employers or financial institutions, it can raise red flags with the IRS. Make sure to accurately report all sources of income, including wages, investments, and freelance earnings, to avoid triggering an audit.

High Deductions

While deductions are a legitimate way to reduce your taxable income, claims that appear disproportionately high compared to similar taxpayers in your income bracket could potentially attract unwanted IRS attention. It's essential to support your deductions with proper documentation and make sure they are in line with IRS guidelines to avoid raising red flags.


Self-employed individuals face a higher risk of audit primarily because of the complexity of their tax returns. The IRS closely monitors self-employment income and deductions to prevent underreporting and tax evasion. If you're self-employed, it's crucial to accurately report all income and expenses related to your business activities and to adhere to tax regulations governing self-employment income.

Inaccurate Reporting

Submitting tax returns with inaccuracies or mathematical errors increases the odds of an audit. Even minor mistakes, such as typos or calculation errors, can draw the IRS's attention and lead to further examination of your financial records. Double-check your tax return for accuracy before filing and consider using tax preparation software or consulting with a tax professional to minimize the risk of triggering an audit.

Unreported Income

Failure to report all sources of income is another common reason for IRS audits. Income from freelance work, investments, rental properties, and other sources must be accurately reported on your tax return to avoid penalties and interest charges. Keep detailed records of all income sources throughout the year, including income statements, invoices, and receipts to ensure compliance with tax laws and regulations.

How to Mitigate Audit Risks

While the risk of an IRS audit can never be entirely eliminated, there are steps you can take to mitigate the likelihood of triggering one.

Maintain Accurate Records

Keeping detailed and accurate records of income, expenses, and deductions is key. Well-organized documentation serves as tangible evidence to support your tax return and reduces the likelihood of discrepancies that could prompt an audit. Keep all relevant documents, including receipts, invoices, bank statements, and tax forms, organized and easily accessible in case of an audit.

Seek Professional Assistance

Navigating the complexities of the tax code can be daunting, especially for individuals and businesses with complex financial situations. Consider seeking assistance from a qualified tax professional, such as a certified public accountant (CPA) or tax attorney, to ensure compliance with tax laws and regulations. A tax professional can provide valuable guidance on tax planning strategies, help you identify potential audit risks, and represent you in the event of an audit.

File Electronically

Filing your tax return electronically can reduce your risk of errors and expedite the processing time. Electronic filing also allows for faster communication with the IRS and reduces the chances of manual entry errors that could trigger an audit. Most of the online tax programs like TurboTax and H&R Block offer electronic filing options, making it easy to file your tax return securely and efficiently. Electronic filing might also help you receive your refund faster, if one is due!

While facing an IRS audit can be a stressful and intimidating experience, understanding the risk factors and taking proactive measures can help minimize the likelihood of triggering one. By following the tips laid out above, you can help ensure compliance with tax laws and regulations, reduce the risk of an audit and breathe easier® about life.


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About the author

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Billy Daniels

Vice President, Private CFO®

A native of Mobile, AL, Billy moved to Atlanta shortly after graduating from The University of Alabama in 2013. Billy joined the oXYGen Financial team as a Vice President in 2019 with 4 years of previous experience in the financial services industry. In his spare time, Billy is an avid golfer, watches as many Braves games as he can, and pulls for his Crimson Tide on Saturdays in the Fall. Billy currently lives in Peachtree Corners, GA with his wife Molly, daughters Margot and Charlotte, and their dog Beau.

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. oXYGen Financial is not affiliated with Kestra IS or Kestra AS. Kestra IS and Kestra AS do not provide tax or legal advice. Investor Disclosures: https://bit.ly/KF-Disclosures

The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation.

Background and qualification information is available at FINRA's BrokerCheck website.

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Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. oXYGen Financial is not affiliated with Kestra IS or Kestra AS. Kestra IS and Kestra AS do not provide tax or legal advice. https://Bit.ly/KF-Disclosures

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