Tax Questions

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 anticipated.


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.