Quick Answer:
The most common IRS and NCDOR audit triggers in Lake Norman, NC include unreported income, excessive deductions, mismatched information returns, and repeated late filings. Maintaining accurate records and filing on time can greatly reduce your audit risk.

Why Audits Happen

Both the IRS and the North Carolina Department of Revenue (NCDOR) use automated systems to identify tax returns that stand out from the norm. Certain red flags, such as unreported income or deductions disproportionate to income, can cause your return to be reviewed and possibly audited.

Top Audit Triggers for Lake Norman Residents & Businesses

1. Unreported Income
If your 1099s, W-2s, or other income forms don’t match your return, an audit is likely.

2. High Deductions Relative to Income
Large charitable contributions, business expenses, or rental losses without sufficient documentation raise red flags.

3. Cash-Heavy Businesses
Restaurants, salons, construction, and other cash-based industries get more scrutiny.

4. Self-Employment Without Proper Documentation
Claiming high expenses without receipts or records is a common trigger.

5. Consistent Late Filings or Amendments
Frequent delays or changes can attract unwanted attention from tax authorities.

6. Mismatch Between IRS and NCDOR Filings
If your federal return doesn’t align with your North Carolina state return, the NCDOR will notice.

How to Avoid an Audit in Lake Norman

  • Keep detailed receipts, mileage logs, and bank statements.

  • Use accurate bookkeeping throughout the year.

  • Report all sources of income.

  • Avoid “estimating” expenses — only claim what you can prove.

  • Work with a licensed tax professional who knows IRS and NCDOR procedures.

How Polaris Tax & Accounting Helps

  • We review your returns for audit red flags before filing.

  • We ensure federal and NC returns match to prevent mismatches.

  • If you are audited, we represent you directly before the IRS or NCDOR.

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Don’t wait for an audit letter to arrive. Contact Polaris Tax & Accounting today for an audit risk review and proactive tax planning to protect your finances.