Many people in the U.S. believe that completing their taxes quickly will lead to quicker refunds. While that may sometimes be true, tax professionals emphasize that accuracy is key.

If your tax return contains discrepancies—whether deliberate or accidental—you could find yourself facing an audit, experts warn.

An audit means the IRS has selected your return for a detailed review. This selection occurs because your filing is among those with a high likelihood of errors or inconsistencies according to the IRS. The agency utilizes algorithms, external data, anonymous tips, and the information you provide to assess whether your reported income, expenses, and credits are correct.

To minimize your chances of being audited, it’s advisable to take your time and ensure your filing is “precise, truthful, and conservative,” says Eric Scaringe, principal at the certified public accounting firm UHY.

What Causes an IRS Audit?

Discrepancies are a major factor. “Tax authorities value information even more than money,” Scaringe notes. “They search for discrepancies and employ AI technology to identify them, which often leads to automated notices being sent.”

For example, be sure to accurately report your income as stated on your W-2 tax form, ensuring it aligns with figures on related documents like a 1099 or W-2, advises Erin Collins, National Taxpayer Advocate of an independent IRS organization dedicated to supporting taxpayers. Failure to do so could trigger inquiries from the IRS.

“Many taxpayers mistakenly use their final paystub of the year,” she points out, which can lead to issues since the last paystub may not accurately reflect their overall income for the year.

She also suggests that parents coordinate who will be claiming a child on tax returns when filing separately, ensuring that other caregivers, like grandparents, do not claim the child unless they meet IRS criteria. Otherwise, this could result in an audit if multiple individuals try to claim the same child as a dependent.

There are common pitfalls surrounding the Earned Income Tax Credit (EITC), where IRS records might indicate that a child claimed by the taxpayer doesn’t qualify under the relationship or residency rules, according to the Taxpayer Advocate.

Michael Steffany, senior tax attorney at Withersworldwide, explains that “the IRS focuses on areas with the highest potential for generating additional tax revenue.”

He’s noticed that audits often target high-net-worth individuals and those with foreign income or entities specifically.

How Does the IRS Decide Who to Audit?

The IRS notes that audits can also result from a random selection process where a computerized system evaluates your return against norms for similar returns.

For instance, a freelancer making $100,000 typically deducts around $5,000 in travel expenses. “If you’re claiming $50,000 in travel costs, that deviation would likely raise a red flag,” remarks Mark Jaeger, vice president of tax operations at TaxAct. “The IRS identifies you as an outlier.”

Another reason for an audit can be if your return is connected to someone else’s—like a business associate or investor—who is under review.

Which Taxpayers Are Most Frequently Audited by the IRS?

In recent years, the IRS has conducted audits more frequently for individuals earning under $25,000 and those over $500,000, according to governmental statistics.

In May, the IRS announced plans to boost audits of high-income individuals (earning over $10 million) by more than 50%. They expect that, by tax year 2026, the audit rate for these taxpayers will increase from 11% in 2019 to 16.5%.

During the same period, the IRS stated that it would not upsurge the “historically low levels” of audits for small businesses and those earning less than $400,000.

What Are the Chances of Being Audited by the IRS?

According to the IRS’s 2023 Data Book, between 2013 and 2021, the agency audited only 0.44% of individual tax returns filed.

In 2022, 3.8 out of every 1,000 tax returns, or 0.38%, were audited, based on data from Syracuse University’s Transactional Records Access Clearinghouse—a decrease from 4.1 out of every 1,000 returns, or 0.41%, the previous year.

Low-income earners claiming the EITC faced a 5.5 times higher chance of being audited compared to others, as these individuals are perceived as easier targets amid a trend towards correspondence audits without adequate IRS resources for taxpayer assistance, the report indicated.

The initial contact from the IRS will occur via mail, with detailed contact information and instructions included in the correspondence.

If the IRS conducts the audit through the mail, they will ask for more documentation regarding specific items on your tax return, such as income, expenditures, and itemized deductions.

If mailing too many records is impractical, you can opt for an in-person audit, with the IRS providing you with relevant contact information and instructions in their letter.

The face-to-face audit can occur at an IRS office, your home, your business, or an accountant’s office. It’s uncommon for IRS agents to appear at your door nowadays.

Typically, the IRS can audit returns filed within the last three years. If they uncover a “substantial mistake,” they can extend the audit to additional years, though rarely going back more than six years.

If you receive a notice regarding an audit, you usually have 30 days to reply. Use this time wisely to carefully read the letter and comprehend what the IRS is requesting. Not every notice signifies an audit, nor are they always linked to your most recent return.

Once you grasp the requirements, you can prepare your response and provide the requested information to the IRS. For minor errors, you can often remit the amount owed or request a payment arrangement.

However, if the issue is more complex, you will need to draft an explanation along with supporting documents or seek assistance from a tax professional. The Taxpayer Advocate Service can also offer valuable guidance.

Whatever actions you choose, do not disregard communications from the IRS. Ignoring them could result in additional penalties and interest charges for late responses or incomplete information, or it could forfeit your opportunity to contest the findings if you disagree with them, as noted by the Taxpayer Advocate.

Medora Lee specializes in reporting on finance, markets, and personal finance.