What are IRS audit flags?
Below are some of the audit flags that can
prompt the IRS to take a look at your tax return.
Information returns discrepancies
If your information returns such as Form
1099 and Form W-2 are not in substantial agreement with the
reported income on your 1040 Form then an IRS audit can be
Excessive itemized deductions
If your itemized deductions are in excess of
norms established for various income levels, the probability of
an IRS audit is increased.
Filing for tax refund claim
Filing of a refund claim by the taxpayer may
prompt an IRS audit of the tax return.
IRS tips from outsiders
Information obtained from other sources such
as informants or news items may lead to an IRS audit. Many
successful plaintiffs are not reporting income from punitive
damages which are taxable.