{"id":4132,"date":"2021-02-24T05:58:32","date_gmt":"2021-02-24T05:58:32","guid":{"rendered":"https:\/\/andersonbradshawtax.com\/blog\/?p=4132"},"modified":"2021-02-24T05:58:32","modified_gmt":"2021-02-24T05:58:32","slug":"common-red-flags-that-could-trigger-an-irs-tax-audit","status":"publish","type":"post","link":"https:\/\/andersonbradshawtax.com\/blog\/common-red-flags-that-could-trigger-an-irs-tax-audit\/","title":{"rendered":"Common Red Flags That Could Trigger an IRS Tax Audit"},"content":{"rendered":"
Many taxpayers are curious about what types of deductions, credits, or other tax filings actually wind up triggering the IRS to initiate an audit. Well, you may be surprised to learn that the red flags identified by the IRS that trigger an audit are the product of computer software. Specifically, the IRS uses a program known as \u201cDiscriminant Information Function\u201d (DIF). This software is designed to detect certain anomalies in tax returns which could potentially lead to an audit. Here is an overview of some of the most common anomalies identified by the DIF program:<\/p>\n

Spikes or Drops in Income<\/h2>\n

Sudden fluctuations in your income could be viewed as a red flag in the DIF program. For example, you now earn in excess of $500,000, there is a good chance that your tax return will receive a higher level of scrutiny.\u00a0 On the opposite end of the spectrum, if you take so many deductions to the point where you wipe virtually all of your income, you are likely to be the subject of an IRS audit.<\/p>\n

Another common red flag for the IRS is if you fail to report income on your return. Keep in mind, the IRS receives copies of all your earnings, including:<\/p>\n