CORAL SPRINGS, FL - A growing number of taxpayers are receiving IRS letters and audit inquiries as federal enforcement activity increases following expanded funding approved under the Inflation Reduction Act.

“Over the past few months we’ve seen an upswing in IRS communications and audit inquiries compared to previous years,” said Rona Durandisse, EA, principal of Ultra Care Tax. “Many people were under the impression they would never hear from the IRS — especially gig workers, pass-through business owners, and higher-income individuals — and now they’re getting letters.”

Durandisse noted that many taxpayers do not realize that IRS audit selection is increasingly driven by automated systems, cross-checking income records, and discrepancies in reporting.

Who May Be More Likely to Receive IRS Audit Notices

Based on case trends and taxpayer reporting patterns, Ultra Care Tax says certain types of individuals and businesses may face a higher likelihood of IRS inquiries, including:

• Independent contractors and gig workers reporting 1099 income

• Taxpayers operating S corporations or partnerships with inconsistent reporting patterns

• Individuals claiming unusually high deductions compared to reported income

• Taxpayers reporting cryptocurrency transactions

• Businesses claiming certain COVID-era credits, including ERC-related filings

“The IRS is using advanced data analysis and enhanced cross-checking technologies,” Durandisse said. “Where discrepancies existed years ago and were often missed, discrepancies are now being identified automatically.”

Why Taxpayers Are Receiving IRS Letters

Ultra Care Tax reports that many recent IRS notices involve:

• Unreported 1099 income

• Third-party payment platforms reporting mismatched totals

• Business deductions lacking proper documentation

• Employee Retention Credit (ERC) filings tied to CARES Act eligibility rules

• Inaccurate income classifications and reporting errors

In some cases, taxpayers may have relied on overly aggressive tax preparers or misunderstood eligibility rules for credits and deductions.

“Receiving an IRS letter does not necessarily mean wrongdoing occurred,” Durandisse said. “However, ignoring the notice can quickly escalate the situation — leading to penalties, liens, or levies.”

Steps Taxpayers Can Take Now

To reduce audit risk and strengthen documentation, Ultra Care Tax recommends that taxpayers:

• Review prior-year tax filings for accuracy and consistency

• Confirm all 1099 and third-party income is properly reported

• Maintain documentation for deductions, credits, and business expenses

• Respond promptly to any IRS correspondence

“Documentation and preparation are the best tools available to defend against audits,” Durandisse said. “There has been a significant shift in how the IRS enforces compliance, and taxpayers should assume a higher level of scrutiny moving forward.”

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