Be Prepared for These 22 IRS Audit Triggers

Determining whose tax returns will be audited by the IRS might not be a perfect science, but there are several triggers known to raise interest. The likelihood of an audit may increase as an individual’s income reaches a certain threshold, or specific entries on a return may be a more likely culprit. Some common red flags apply to only individuals, and others can apply to businesses as well. No matter the scenario, here’s a list of 22 triggers some tax preparers believe may trigger an audit:

1. Outsized charitable contributions
2. Large property contributions
3. Unmatched alimony
4. High mortgage interest
5. Unreported income
6. Gambling losses
7. Miscellaneous itemized deductions
8. Foreign bank accounts
9. Unreimbursed employee business expenses
10. Cash transactions
11. Rental losses of a real estate professional
12. Casualty losses
13. Bad debt losses
14. Home office
15. Day-trading losses
16. Net operating loss
17. Rental losses
18. Hobby losses
19. Travel and entertainment
20. Auto usage
21. Repairs and maintenance
22. Zero officer salaries for an S corporation