What triggers the IRS to audit someone?

What triggers the IRS to audit someone includes a variety of red flags and statistical anomalies that suggest potential underreporting or errors. Common triggers include large discrepancies between income reported on W-2s and 1099s versus what you report on your tax return, which the IRS matches automatically, unusually high deductions compared to income level, especially for charitable contributions, business expenses, or home office deductions, large cash business income with low reported profit, claiming excessive business losses year after year, especially for hobbies classified as businesses, high income earners generally over $500,000 who face higher audit rates, math errors and rounding numbers that look estimated, claiming 100 percent business use of a vehicle, large alimony, rental losses, or foreign bank accounts not reported on FBAR, and failing to report cryptocurrency or gig economy income that is now reported by platforms. The IRS also uses the Discriminant Function System score that assigns a risk score based on how far your return deviates from norms for similar returns, and returns with highest scores are selected for audit. Random selection also occurs, and related audits can trigger if your business partner is audited.