No, filing a tax extension does not increase your risk of an IRS audit; in fact, it can actually decrease it by giving you more time to file a complete, accurate return, which reduces common errors that trigger audits, and some tax pros suggest audit quotas are often met by the original deadline. The IRS uses a system (DIF) to select returns, and extensions aren't a factor in that, with the key to avoiding penalties being to pay your estimated taxes by the original deadline.
❌ False. Filing an extension does not increase your chances of being audited. The IRS selects returns for audits using a variety of methods, including: Discriminant Information Function (DIF): This computerized system scores returns based on various factors, with higher scores more likely to trigger an audit.
An extension gives you extra time to file, but not extra time to pay. After you file an extension, if you owe taxes when you file your return, you might also have to pay penalties and interest on the tax due.
That being said, it's important to be aware of “triggers” for IRS audits, below is a list of some of the more egregious items.
For those who are terrified of extensions, remember that they're okay. Unless you file for extensions for years and years, they're not going to increase your chance of being audited, and they won't have any consequences if you pay your taxes on time.
Using a reputable tax preparer – including certified public accountants, enrolled agents or other knowledgeable tax professionals – can also help avoid errors.
If you use software to file an extension online, you'll get confirmation that your extension was accepted. The IRS does not confirm extension requests sent by U.S. mail or an authorized private delivery service. But they will notify you if they deny your extension.
Unreimbursed employee expenses are perceived to be one of the most common IRS red flags. The IRS frequently reviews unreimbursed employee expenses in audits, as they are widely considered a high abuse category for W2 employees.
What happens during an audit? Internal audit conducts assurance audits through a five-phase process which includes selection, planning, conducting fieldwork, reporting results, and following up on corrective action plans.
If you file more than 60 days after the due date, the minimum penalty is $525 (for tax returns required to be filed in 2026) or 100% of your unpaid tax, whichever is less.
Filing a tax extension is not a bad thing. There is no penalty for filing a tax extension. However, not paying on time or enough, or failing to file altogether, may cost you.
An extension gives extra time to file, but it does not give taxpayers extra time to pay if they owe.
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 IRS mostly audits tax returns of those earning more than $200,000 and corporations with more than $10 million in assets.
The CBDT's extension of the tax audit due date to October 31, 2025, provides a welcome relief for taxpayers and professionals. However, it is essential to utilise this additional time effectively to avoid penalties under Section 271B.
Here are 12 IRS audit triggers to be aware of:
If the deductions, losses, or credits on your return are disproportionately large compared with your income, the IRS may want to take a second look at your return. Taking a big loss from the sale of rental property or other investments can also spike the IRS's curiosity.
Audit risk in 2025 is driven by both individual behavior and IRS algorithms. Common triggers include high income, unusually large deductions, unreported freelance income, filing errors, and business classification issues.
The IRS can usually assess tax, by law, within 3 years after your return was due, including extensions, or – if you filed late – within 3 years after we received your return, whichever is later. This time period is called the Assessment Statute Expiration Date (ASED).
This is simply not true. Filing an extension does not increase your audit risk in any way. While the IRS doesn't disclose exactly what triggers an audit, as experienced CPAs, we do see certain patterns.
October 15, 2026 - Deadline to file your extended 2025 tax return. If you chose to file an extension request on your tax return, this is the due date for filing your tax return. December 31, 2026 - Required minimum distributions have to be taken for individuals age 73 or older by the end of 2026.
Students often ask for an extension because of deadlines in other classes, exams, work or career development events that overlap with the deadline, and last-minute emergencies. Whatever the reason, you don't need a long explanation of your circumstances — just quickly mention the conflict and request an extension.