Yes, tax refunds can be randomly selected for review, along with computerized screening and comparison of information (W-2s/1099s). The IRS uses random sampling to check for accuracy, and having a return flagged does not automatically imply fraud or error. While some selections are random, others are based on high Discriminant Function System (DIF) scores, which flag deviations from income/deduction norms.
Comments Section Audits are randomly selected, but there are certain ``triggers'' that could flag a tax return for audit. These triggers could be anything from claiming certain tax credits to unusually high charitable deductions for your tax bracket.
There are many reasons why the IRS may be holding your refund. You have unfiled or missing tax returns for prior tax years. The check was held or returned due to a problem with the name or address. You elected to apply the refund toward your estimated tax liability for next year.
The IRS uses a combination of automated and human processes to select which tax returns to audit. Not reporting all of your income is an easy-to-avoid red flag that can lead to an audit. Taking excessive business tax deductions and mixing business and personal expenses can lead to an audit.
The percentage of individual tax returns that are selected for an IRS audit is relatively small. From 2020-2023, less than 0.50% of individual returns were selected for audits — the lowest of any published audit rate since 1950.
The IRS has no maximum time limit when it comes to processing tax refunds, but after 45 days, it is required to pay interest on your refund. In most cases, you can expect the IRS to issue your tax refund within 21 days of filing your tax return.
Employees will review and either manually release the refund or confirm the error. If an error is confirmed, a notice will be sent to the taxpayer either requesting additional information or informing the taxpayer the error has been corrected through the IRS's math error authority.
Common IRS audit triggers
IRS Audit Red Flags 2023: 25 Tax Return Audit Risk Factors
How we calculate the penalty. In cases of erroneous claim for refund or credit, a penalty amount is 20 percent of the excessive amount claimed. An “excessive amount” is defined as the amount of the claim for refund or credit that exceeds the amount allowable for any taxable year.
What should I do? Request an expedited refund by calling the IRS at 800-829-1040 (TTY/TDD 800-829-4059). Request a manual refund expedited to you.
You may face an IRS audit after an IRS review. If the IRS reviews your information and detects inaccuracies in your tax returns, it may conduct a comprehensive audit to look into the matter further.
You generally shouldn't worry if your refund is "still being processed," as it means the IRS is working on it, but it might take longer than the typical 21 days due to common issues like errors, incomplete information, or claiming credits like the EITC/ACTC. Worry only becomes necessary if you receive an IRS letter requesting more information or if the "Where's My Refund?" tool shows a specific problem like fraud, but typically, it just means a longer wait, not no refund at all.
Ultimately, the IRS selects returns for audit because the agency suspects that, due to understatements of income or overstatements of deductions, the taxpayer has not correctly reported their tax due. If a taxpayer is selected for audit, the IRS will send notice by mail.
Why is my return being reviewed? We select some returns to review so we can determine whether income, expenses, and credits are reported correctly. This doesn't mean you made an error or were dishonest.
You know the IRS might be investigating you through official mail (first contact), phone calls (often with automated messages to IRS.gov), or in-person visits, but signs of a criminal probe include contact with IRS Criminal Investigation (CI) agents, subpoenas to you or your bank, questions to your accountant/bank, unusual account activity (freezing/refusing transactions), or agents suddenly going silent after an audit. Key indicators are official IRS letters, contact from CI special agents, third-party inquiries, and formal summonses for records, signaling serious scrutiny beyond a simple audit.
One-time forgiveness, officially known as First-Time Penalty Abatement (FTA), is an IRS program that allows qualified taxpayers to have certain penalties removed from their tax accounts.
IRS audits are triggered by discrepancies the IRS's automated systems catch, like unreported income from 1099s, claiming excessive deductions (charity, business meals, home office) compared to your income bracket, large business losses, math errors, significant income jumps, or claiming hobby losses as business expenses, with higher-income earners generally facing more scrutiny.
Processing your refund usually takes: Up to 21 days for an e-filed return. 6 weeks or more for returns sent by mail. Longer if your return needs corrections or extra review.
2. Making a lot of money. While the overall individual audit rates are extremely low, the odds increase significantly as your income goes up (especially if you have business income). According to IRS audit statistics, about 0.4% of total individual returns get audited by the IRS.
The return itself is incomplete. You may be missing a number or a signature, for example. Your return contains errors. You are a victim of identity theft or fraud that has affected your tax return.
They'll look for math errors, check if you owe back taxes or unpaid child support, and more. If they need to make any corrections, they may offset (reduce) or increase your refund.
Most federal tax refunds are issued within 21 days, but some may take longer if the return requires additional review. Once the IRS has accepted your return, TurboTax can't provide updates on where your refund is at. If your federal refund is late, follow these steps: Check the IRS Where's My Refund?