What Can Trigger An IRS Audit?

Education & Training with Apex Tax Defense LLC

I focus my practice on tax resolution, representing taxpayers in Colorado, Florida, Texas, New York, California and elsewhere. An IRS audit is an examination of an individual or a business's tax returns to ensure that all information is accurate and that taxes have been calculated correctly. Although an audit can happen at any time, there are certain triggers that can increase the likelihood of an audit.

1 - High Income: People with high incomes are more likely to be audited. The IRS tends to focus on higher-income taxpayers as they believe they have a higher likelihood of underreporting their income or claiming excessive deductions.

2 - Large Deductions: If you claim a high amount of deductions relative to your income, this can trigger an audit. The IRS may question whether the deductions are legitimate.

3 - Self-Employment: Self-employed individuals are more likely to be audited than those who are employed by someone else. The IRS may question the validity of business expenses, especially if they are high relative to the income reported.

4 - Home Office Deduction: If you claim a home office deduction, you must be careful. The IRS will examine this deduction to make sure it is legitimate and meets all the requirements.

5 - Unreported Income: If the IRS suspects that you have unreported income, they may audit your tax return. This can happen if they receive information from a third party, such as a bank or employer, that shows that you received income that was not reported on your tax return.

In conclusion, the best way to avoid an audit is to make sure that your tax returns are accurate and that you have documentation to support all of your claims. If you are audited, be prepared to provide documentation and explain any discrepancies.

If you or someone you know has back taxes to deal with, don't hesitate to contact us immediately at 303-499-2700 or by email at mmoran@apextaxdefense.com.
Michael Moran, CEO, EA
Apex Tax Defense LLC
825 S Broadway
Boulder, CO 80305
Phone: 303-499-2700
Fax: 888-478-7627

Comments (1)

Bill Salvatore - East Valley
Arizona Elite Properties - Chandler, AZ
Realtor - 602-999-0952 / em: golfArizona@cox.net

Great information.  Thanks for sharing and enjoy your week!

Feb 06, 2023 11:30 AM