The IRS audits less than one percent of individual returns, but certain factors can significantly increase your odds. Understanding what catches the IRS attention can help you file accurately and reduce unnecessary anxiety — especially if you are already dealing with tax debt.
Common Audit Triggers
The IRS uses a computerized scoring system called the Discriminant Information Function, or DIF, to flag returns for review. Several things can raise your DIF score. Reporting unusually high deductions relative to your income is a major trigger — if your charitable contributions or business expenses are far above what is typical for your income bracket, expect scrutiny. Large round numbers on your return look suspicious because real expenses rarely come out to exactly $5,000. Claiming 100 percent business use of a vehicle is another red flag.
Income-Related Triggers
Failing to report all your income is the surest way to trigger an audit. The IRS receives copies of every W-2, 1099, and K-1 issued to you, and its automated matching system compares these to what you report. Even a small discrepancy can generate a CP2000 notice proposing additional tax. Self-employed individuals reporting very high income or claiming consistent losses year after year also face increased audit risk — the IRS wants to know whether the activity is really a business or just a hobby.
What Happens If You Are Audited?
Most audits are conducted by mail — the IRS simply requests documentation for specific items on your return. Only a small percentage involve in-person meetings. If you receive an audit notice, respond by the deadline, provide only the documents requested (do not volunteer extra information), and consider professional representation. An audit does not automatically mean you did something wrong — sometimes the IRS just needs clarification. But if the audit does result in additional tax owed, you have options including payment plans and appeals.