What typically triggers an audit by the IRS?

An audit by the IRS is typically triggered when there are discrepancies or red flags in submitted tax returns. This can include inconsistencies between reported income and third-party documents, unusual deductions that are significantly higher than the norm for a specific income level, or failure to report all income sources. The IRS uses sophisticated algorithms and data analysis techniques to identify returns that present anomalies, raising the likelihood that further scrutiny is warranted.

While a random selection for audit does occur, it is not a common or primary trigger. High income levels alone do not necessarily provoke an audit unless accompanied by unusual activity or discrepancies. Filing an amendment, on the other hand, does not inherently lead to an audit but may draw the attention of the IRS if the amendment itself shows substantial changes that deviate from previously reported information. Thus, discrepancies or significant red flags in tax returns are the most critical factors that compel the IRS to initiate an audit.