Who is at risk for being audited by the IRS?

Filing your tax return can be stressful. For many people, once your tax return is filed, you don’t have to worry or think about it again until next year. However, some individuals may be contacted by the Internal Revenue Service about their tax return.

The IRS does audit individual tax returns every year. The good news is that they only audit roughly less than one percent of all tax returns filed by taxpayers. How do you know if you are at risk for being audited?

There are certain factors that are red-flags for the IRS and may trigger an audit. The following factors may increase the odds for an audit:

•    Reporting more than $10 million in income
•    Reporting no income at all
•    Filing an estate tax return with assets worth more than $5 million
•    Filing an international tax return
•    Being self-employed
•    Claiming a lot of deductions

Any of these factors can increase the chance of being audited by the IRS. An audit can be difficult to understand and can have serious repercussions if there are any mistakes or errors on your tax return. Even though a majority of tax returns will not be audited by the IRS, tax returns with any of these red flags will increase your odds of having the IRS audit your tax return.

If you find yourself facing an audit by the IRS, do not worry. However, it is important to work with a tax attorney as soon as possible to protect your rights and to address any issues that may arise.

Source: Time, “These Are the People Who Are Most Likely to Get Audited,” Kara Brandeisky, April 14, 2015