An IRS is not a fun event. My personal experience includes 9 years and 3 entities audited. With diligent work I was able to get a substantive win.
Clients ask if there are red flags on tax returns that trigger audits. Here is an article listing what they call the top 10 audit triggers. https://aofund.org/resource/top-10-irs-audit-triggers-and-what-do-if-audited/
My viewpoint is that fearing an audit is NOT a reason to avoid any of these deductions or circumstances. Unfortunately, it has become easier for the IRS to grab low hanging fruit by auditing lower incomes than had previously been considered high audit risk categories. Always report income as required. The result is a correct top line and a good start. Deductions have a history of abuse by some. Even tax preparers can lean into this bad idea. But again, just because a certain deduction may be on the list of triggers is NOT a reason to keep away from using it.
If income is stated correctly and allowed deductions are supported by the facts, use all you are entitled to in order to legally pay the least income tax you can. Not all audits are successful for the IRS and many get settled in one way or the other. The average taxpayer is within his or rights in ding so. The Supreme Court said "Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one's taxes.. You can look into the entire case where this statement appeared https://www.law.cornell.edu/supct/html/92-1941.ZC.html.
I have always promoted the idea that we should prepare tax returns to legally pay the lowest tax possiblee. An important point here is that the IRS only rewards certain activities and behaviors including the structure of an entity, Estate or trust. It punishes by taxing behavior it does not want. It surprises some to learn that the tax laws of virtually all countries are not merely money grabbing to pay fror government etc but also behavioral controls. A good paper on this topic can be seen at https://www.jstor.org/stable/245298. Suffice it to say that any law including tax law is at least in part designed to influence behavior.
In summation, take all supported legal; deductions and do not fear audits. Doing something sneaky might trigger one but most of that top 10 list can be the right thing and just raise the hairs on the IRS's neck.
Best,
Donn Marier
DM-Your Own CFO