4 red flags for an IRS tax audit — including what one tax pro calls a ‘dead giveaway’

This tax season, there have been heightened concerns about IRS audits as the agency begins to deploy its nearly $80 billion in funding.

While the IRS plans to hire more workers, including enforcement agents, experts say there’s no need to worry — as long as you keep proper documentation.

Still, certain red flags are more likely to trigger an IRS audit, experts say. “Round numbers are a dead giveaway,” said Preeti Shah, a certified financial planner at Enlight Financial in Hamilton, New Jersey. She is also a certified public accountant.

Here’s why round numbers catch the agency’s attention, and three more closely watched factors.

When claiming tax breaks, it’s important to use accurate numbers rather than estimates on your return, experts say. Round numbers indicate you’re estimating.

For example, if you’re a sole proprietor with $5,000 for advertising, $3,000 for legal expenses and $2,000 for support, “the IRS knows you’re just winging it,” Shah said.

A key issue that may trigger an IRS audit is missing income, according to John Apisa, a CPA and partner at PKF O’Connor Davies LLP.

Your tax return must match the income reported by companies and financial institutions or you may get an automated notice from the IRS. For example, it may be easy to skip Form 1099-NEC for contract work or Form 1099-B for investment earnings, he said. 

You should wait to file until you have all your documentation in hand and check to make sure what you entered matches what’s on the forms. “You have to be careful, even with the simpler stuff,” Apisa said. 

Another possible tipoff is attempting to claim credits or deductions that seem too high when compared to your income, Apisa said. 

When your tax breaks don’t align with what’s expected for your income level, “there’s usually a flag there,” he said. For example, if you have $90,000 of earnings with $60,000 in charitable…