Red Flags That IRS Agents And Examiners Look For

This article provides a list of the red flags that IRS agents and examiners look for when deciding who to audit. Making a lot of money or failing to report all taxable income can draw the attention of the IRS. People who make higher-than-average deductions or who take out large charitable deductions can also be subjected to increased scrutiny. Running a small business or writing off losses for a hobby are things that the IRS looks into. The IRS will also examine people who engage in currency transactions or who claim the home office deduction. People who trade in securities and claim day-trading losses on schedule c also need to be careful. The IRS also pays special attention to those who take early payouts from an IRA or 401(k) account. These are just a few of the red flags that this article identifies.

See “Red Flags” To The IRS Agents And Examiners, Foodman CPAs & Advisers, March 16, 2016.