23 IRS Audit Red Flags

These actions and tax positions could increase your chances of the IRS selecting your return for audit.

picture of road sign saying "IRS audit ahead"
(Image credit: Getty Images)

As you're getting ready to file your tax return, you may be wondering about the chances that the IRS will audit your return. Most people can breathe easily because the vast majority of individual returns escape the audit machine. In recent years, the IRS has been auditing significantly less than 1% of all individual tax returns – and the trend has been towards fewer audits from one year to the next. Plus, most audits are handled solely by mail, meaning taxpayers selected for an audit typically never actually met with an IRS agent in person.

But this doesn't mean it's a tax cheat free-for-all. The bad news is that your chances at the unenviable audit lottery escalate (sometimes significantly) depending on various factors, including the complexity of your return, the types and amounts of deductions or other tax breaks you claim, whether you're engaged in a business, or whether you own foreign assets. Math errors could also draw an extra look from the IRS, but they usually don't lead to a full-blown exam. The same goes for errors with refundable tax credits, such as the expanded 2021 child tax credit. In the end, there's no sure way to predict an IRS audit, but these 23 red flags could certainly increase your chances of drawing unwanted attention from the IRS.

Joy Taylor
Editor, The Kiplinger Tax Letter

Joy is an experienced CPA and tax attorney with an L.L.M. in Taxation from New York University School of Law. After many years working for big law and accounting firms, Joy saw the light and now puts her education, legal experience and in-depth knowledge of federal tax law to use writing for Kiplinger. She writes and edits The Kiplinger Tax Letter and contributes federal tax and retirement stories to kiplinger.com and Kiplinger’s Retirement Report. Her articles have been picked up by the Washington Post and other media outlets. Joy has also appeared as a tax expert in newspapers, on television and on radio discussing federal tax developments.