Certain groups of taxpayers may be more likely to be audited by the IRS due to various factors.

Here are some categories of taxpayers who may face a higher likelihood of being audited…

1. High-Income Individuals – Taxpayers with high incomes are more likely to be audited because there’s a greater potential for substantial tax liabilities. The IRS may focus on high-income earners to ensure compliance with tax laws and to prevent tax evasion.
2. Self-Employed Individuals and Small Business Owners – Self-employed individuals and small business owners may be subject to closer scrutiny because of the potential for underreporting income or overstating deductions. The IRS may audit these taxpayers to verify the accuracy of reported income and expenses.
3. Taxpayers with Complex Tax Returns – Tax returns with complex financial transactions, investment activities, or multiple sources of income may receive increased scrutiny. The IRS may audit these taxpayers to ensure that income is accurately reported and deductions are legitimate.
4. Taxpayers Claiming Earned Income Tax Credit (EITC) – The Earned Income Tax Credit (EITC) is a refundable tax credit for low to moderate-income individuals and families. Due to the complexity of eligibility requirements and the potential for improper claims, taxpayers claiming the EITC may be subject to closer scrutiny and audits.
5. Taxpayers with Offshore Accounts or Assets – Taxpayers with foreign financial accounts or assets are subject to additional reporting requirements, including the Foreign Bank Account Report (FBAR) and the Foreign Account Tax Compliance Act (FATCA). Failure to disclose foreign accounts or report foreign income accurately can lead to audits and significant penalties.
6. Taxpayers with Large Charitable Contributions – Taxpayers who claim large charitable contributions relative to their income may attract attention from the IRS. The IRS may audit these taxpayers to verify the legitimacy of claimed deductions and ensure compliance with reporting requirements.
7. Taxpayers with Rental Real Estate Activities – Taxpayers who own rental real estate properties may be subject to audits to ensure that rental income is accurately reported and that expenses and deductions are properly claimed.
8. Taxpayers with Previous Audit History – Taxpayers who have been audited in the past or who have a history of noncompliance with tax laws may be subject to increased scrutiny in future tax years.

While these groups may be more likely to be audited, audits can happen to anyone, regardless of their income or tax situation. The IRS conducts audits to ensure compliance with tax laws and to maintain the integrity of the tax system. It’s essential for all taxpayers to accurately report income, deductions, and other tax-related information to minimize the risk of an audit and ensure compliance with tax laws.