Free Documentation Checkup
IRS Audit Risk Score
Built for contractors and trades businesses — cash jobs, 1099 subcontractors, home office and vehicle deductions — but useful for any business owner. Answer 11 quick questions and get an illustrative Audit Risk Score, plus your top 3 documentation flags and the specific fix for each.
What this score is — and isn't
This tool flags documentation patterns that correlate with higher IRS audit selection rates. It is illustrative and educational only — it is not a prediction of whether your business will be audited, and no CPA can guarantee an audit won't happen. Results are estimates for educational purposes and do not constitute tax advice.
Audit risk, answered
What actually draws attention on a practice return, what does not, and what protects a position when attention arrives.
What draws IRS attention to a practice return?
Returns are scored for characteristics that historically correlate with adjustments, and the patterns that stand out are proportional rather than absolute: deductions that are large relative to reported revenue, categories out of line with the norms for that industry and size, round numbers where precision would be expected, and inconsistencies between the entity return and the owner's personal return. The absolute dollar size of a practice matters far less than whether its numbers look internally coherent.
Does an S-corp with no officer compensation get flagged?
It is one of the most recognizable patterns on a pass-through return. An 1120-S reporting meaningful distributions with zero officer compensation states on its face that an owner performed services without pay, which is the exact fact pattern the reasonable-compensation rules address. It does not guarantee examination, but it is a self-reported inconsistency rather than something that has to be discovered.
Does filing an extension increase audit risk?
There is no public evidence that it does. Extensions are automatic and require no explanation, and millions are filed annually. The relevant comparison is against the alternative: a return rushed to meet an original deadline is more likely to contain the errors and inconsistencies that actually correlate with adjustments than an accurate return filed in October.
What are the actual odds of being audited?
Examination rates for individual and small business returns have been low in recent years by historical standards, though they vary by income level, entity type, and the specific issues on the return, and enforcement priorities shift over time. The more useful framing for a practice owner is not the probability but the exposure — what an adjustment would cost, and whether the positions taken could be supported if one arrived.
What actually protects a position?
Contemporaneous documentation, consistency across related returns, and a defensible basis for each judgment call — particularly compensation, which is the most commonly adjusted item on a small S-corp. Positions supported by a file assembled at the time tend to resolve; positions reconstructed after a notice tend not to. The protective work happens during the year, not during the examination.