Avoiding Audits: How to Reduce Your Risk and Stay Confident at Tax Time

No one wants to get that letter from the IRS. Even when you’ve done everything right, the thought of an audit can cause unnecessary stress. The truth is, most audits can be avoided with careful planning, accurate reporting, and consistent recordkeeping.

At Kamish & Associates, we help clients build habits that keep them audit-ready all year long. Here’s what you need to know about what triggers an audit, and how to reduce your risk.

What Typically Triggers an Audit

Most IRS audits aren’t random. They’re often the result of inconsistencies, missing information, or numbers that don’t quite add up. Common audit triggers include:

• Unreported income: The IRS automatically matches your return with income forms (like W-2s, 1099s, and investment statements). Missing one can raise a flag.

• Unusual or excessive deductions: Large deductions that seem out of line with your income or profession can attract attention.

• Repeated business losses: If your business consistently reports losses, the IRS may question whether it’s a legitimate enterprise or a hobby.

• High-value or cash transactions: Businesses that deal heavily in cash, such as restaurants or salons, tend to get more scrutiny.

• Math or data entry mistakes: Even small errors in addition or miskeyed numbers can lead to questions about accuracy.

Common Mistakes That Lead to IRS Audits

You don’t need to break the rules to be audited. Simple oversights can create problems, including:

• Forgetting to include freelance or side income.

• Claiming dependents who don’t meet eligibility requirements.

• Blurring the line between business and personal expenses.

• Missing or incomplete records to support deductions.

• Overstating charitable donations without proof.

Accuracy and documentation go hand in hand. A well-organized paper trail is your best protection.

Best Practices to Stay Audit-Ready

Avoiding an audit isn’t about doing more work, it’s about doing the right work. Here are a few steps to keep your return clean and compliant:

1. Keep thorough records. Save receipts, invoices, mileage logs, and donation acknowledgments for at least three years.

2. Report all sources of income. Even small 1099s or cash earnings need to be included.

3. Be realistic with deductions. Only claim legitimate, well-documented expenses.

4. Explain major changes. Large shifts in income or write-offs should have a clear reason or supporting detail.

5. Work with a tax professional. A trusted advisor can catch errors early and ensure your return follows current IRS guidelines.

Documenting Donations and Non-Cash Contributions

Charitable giving is one area the IRS looks at closely, especially when non-cash items are involved. To protect your deductions:

• Get written confirmation for any single donation of $250 or more.

• List details for non-cash gifts, including item descriptions, condition, and estimated fair market value.

• Use realistic valuations. Don’t claim more than what an item could reasonably sell for today.

• Obtain an appraisal for donations worth more than $5,000, and attach the required IRS forms.

  
  

Proper documentation keeps your generosity fully compliant, and audit-proof.

Final Thoughts

An audit isn’t always a sign of wrongdoing, but it’s a process most taxpayers would rather avoid. With accurate records, thoughtful planning, and trusted guidance, you can file with confidence year after year.

At Kamish & Associates, we’re here to help you stay organized, compliant, and audit-ready, so you can focus on your goals, not your paperwork.

Contact us today to schedule a consultation or review your tax documentation. We’ll help you navigate tax season with confidence and peace of mind.