Why a person would get audited by the IRS or other authority usually comes down to risk factors, discrepancies, and random selection. The most common reason is automated detection of mismatches, the IRS receives copies of W-2s, 1099s, and other income reports, and if the income you report does not match those, it triggers a notice or audit. Another reason is statistical scoring, the IRS uses a discriminant function system that assigns a score based on how much your return deviates from norms for similar income levels, high scores are selected for examination. Specific items that increase likelihood include high income, self-employment with large business deductions, claiming large charitable contributions relative to income, reporting consistent business losses that look like a hobby, claiming 100 percent business use of a vehicle, large home office deductions, and failing to report foreign accounts or cryptocurrency. Earned Income Tax Credit claims also have higher audit rates due to complexity. Sometimes audits happen because a business partner or related return was audited and yours is connected. Finally, some audits are purely random for compliance research. Being audited does not necessarily mean you did something wrong, it means your return was selected for verification to ensure accuracy and fairness in the tax system.
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