IRS tax audits have a reputation for being unpleasant. Even if you did not make any major mistakes or attempt to commit fraud, the proceedings can be tedious and stressful. Fortunately, the odds of getting audited are fairly slim, especially for those who have a simple financial situation. According to NerdWallet, less than 1% of returns filed in 2015 were examined in 2016. That doesn’t mean every return has less than 1% chance of being audited, however, because certain factors make some more likely to be reviewed than others. As your financial situation changes, so too will your odds of being audited. Here are just a few factors likely to affect the odds over the years.

Your Total Income 

People who make less than $200,000 annually are much less likely to face IRS tax audits than those who make more. However, individuals who earn a salary that is less than six figures may still be vulnerable to an audit in certain scenarios. For example, if their return includes a miscalculation or they claim too many charitable donations, it could raise red flags. Failing to report a portion of your income can also increase the odds of being audited, regardless of how much you make.

Your Revenue Streams 

The IRS more closely scrutinizes not only higher earners but also those who earn their money in certain ways. For example, according to Nasdaq, individuals are more likely to face IRS tax audits if their return includes income from a small business, farm, or rental property. Typically, the odds of being audited are 1 in 427, but if you report income from any of these sources, they increase to 1 in 143. 

If you are facing an audit or some other complicated tax issue, turn to Brian Kawamoto, Attorney in Aiea, HI. This seasoned lawyer has considerable experience helping clients navigate IRS tax audits, bankruptcy filings, and foreclosure proceedings. As a prior IRS tax attorney, he has more than 25 years of experience practicing tax law. Visit his website or call (808) 486-6107 to schedule an initial consultation today.