Are You at Risk for an IRS Audit?

The word “audit” can be one of the most stressful parts of taxes—but most audits aren’t random. In fact, many IRS audits are triggered by patterns, inconsistencies, or unusual entries on your return.

We specialize in helping individuals and business owners resolve IRS issues—including audits, notices, and back taxes.

1. What Is an IRS Audit?

An audit is when the IRS reviews your tax return in more detail to verify accuracy. This can range from a simple letter requesting documents to a full in-person review of your finances.

• Most audits are correspondence-based and resolved by mail.
• Less than 1% of all returns are audited—but the chances increase based on certain risk factors.

2. Common IRS Audit Triggers

The IRS uses automated systems and algorithms to flag returns with potential issues. Here are some of the top triggers:

• High Income: Taxpayers earning over $200,000 face higher audit rates, especially with itemized deductions.
• Large or Unusual Deductions: Claiming significantly higher deductions than others in your income range (charity, medical, meals, travel).
• Unreported Income: If you forget to report income from a 1099, gig work, or stock sale, it may trigger a mismatch flag.
• Self-Employment Losses: Repeated losses from a Schedule C business may raise suspicion of a hobby rather than a real business.
• Home Office Deduction: While valid for many, this is a common audit trigger when calculated incorrectly or without proper records.
• Round Numbers and Estimations: Deductions or expenses ending in “.00” can signal estimates rather than actual tracked numbers.

3. What to Do If You’re at Risk

Even if you haven’t been audited, here’s how to protect yourself:

• Double-check your return: Accuracy matters. Make sure all documents are included and numbers are backed by records.
• Keep organized documentation: Save receipts, mileage logs, charitable letters, and proof of deductions for at least 3 years.
• Avoid guesswork: Don’t estimate deductions or “fill in” expenses without records—this is a red flag.

4. What Happens If You Are Audited?

The IRS will send a letter explaining what they’re reviewing and what documentation is needed. Types of audits include:

• Correspondence Audit: A letter requesting receipts or clarification. Most common and least invasive.
• Office Audit: You’re asked to appear at an IRS office with records.
• Field Audit: An IRS agent visits your home or business. This is rare and usually more serious.

Important: The IRS will never initiate an audit via phone, email, or text. Only official letters are used.

5. When to Get Professional Help

If you’ve received an IRS letter—or believe you’re at risk for an audit—it’s important to act fast. Responding incorrectly or ignoring the request can result in:

• Additional penalties and interest
• Loss of deductions
• Back taxes owed

Additional Resources:

• IRS: What to Expect from an Audit
• IRS Topic 503: Tax Return Examinations (Audits)
• BadranTax: Tax Resolution Services

Frequently Asked Questions (FAQ)

Amro Badran, EA, is the Managing Partner of Badran Tax,

With over 40 years of experience and accreditation as a Federal Enrolled Agent,
Amro Badran and his team of tax professionals specialize in helping individuals and businesses resolve complex IRS & state tax issues and controversies.

Experienced and Trusted Tax Resolution Firm based in New Brunswick, NJ.

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