What are common mistakes that delay refunds or trigger audits?

Here’s what HIVE AI had to say about “What are common mistakes that delay refunds or trigger audits?”:

Common mistakes that delay refunds or trigger audits

Biggest refund‑delaying mistakes

• Entering incorrect credit amounts (for example, Child Tax Credit, Recovery Rebate Credit) instead of using IRS letters/Online Account to reconcile; the IRS adjusts these and it slows processing 1
• Filing before you receive all information returns (W‑2s, 1099s, 1095‑A). Mismatches against IRS records commonly cause holds and notices 2
• Math/clerical errors, inconsistent entries on the return, or missing substantiation info. These are “math error” issues the IRS can correct, which delays or changes your refund 3
• Incorrect bank routing/account numbers for direct deposit; deposits may be rejected, converted to paper checks, or misdirected, which takes longer to resolve 4
• Identity and name/SSN mismatch issues for taxpayers or dependents, including expired ITINs; ERO guidance stresses verifying IDs/SSNs/ITIN status to avoid rejects and delays 5
• Not carefully reviewing the return before filing; the IRS has long warned that basic preparation errors delay refunds 2
• Very large refunds (over $2 million) must be reported to the Joint Committee on Taxation; IRS cannot pay until 30 days after the report, which delays issuance 6
• Forgetting to include or reconcile Form 1095‑A (Marketplace insurance) when applicable; this is a frequent processing delay when the Premium Tax Credit must be reconciled 1
• Omitting copy/record‑keeping and bank verification steps the IRS highlights for timely refunds (for example, double‑check direct deposit details) 7

Direct deposit problems that slow refunds

• Wrong or incomplete routing/account numbers can lead to paper checks or deposits rejected by banks; if funds land in someone else’s account, you must work through the bank, not the IRS 4
• If a refund is misdirected, the IRS has procedures to report, trace, and correct misdirected direct deposits under the Taxpayer First Act regulations 8
• The Code directs Treasury to establish misdirected direct deposit procedures and recovery/redirect to the correct account, which adds time 9

Things that often trigger audits or adjustments

• Improper or unsupported claims of refundable credits and family status benefits; preparers are subject to a due‑diligence penalty for not verifying eligibility, and these areas are audit‑prone (EITC, CTC/ACTC, AOTC, Head of Household) 10
• Patterns or indicators of potential fraud or evasion (for example, noncooperation, repeated procrastination with examiners); these badges of fraud can escalate an inquiry 11
• Erroneous refund or credit claims, frivolous positions, or claims lacking reasonable cause. IRS guidance notes penalties for erroneous refund claims and frivolous submissions; such filings invite scrutiny 12
• Claiming amounts that conflict with information the IRS already has (for example, wage, interest, or broker 1099s); these inconsistencies are classic “math/clerical” issues that trigger adjustments or notices 3
• Aggressive or ineligible pandemic ERTC claims. New 2025 law tightened enforcement, extended assessment periods to 6 years, and broadened penalties for erroneous refund claims in this area; expect heightened audits 13
• Late‑cycle or incomplete refund claims in complex areas (for example, research credit) are deprioritized and scrutinized; examiners are instructed not to let such claims delay case closures and to require full substantiation 6

Practical ways to reduce delays and audit risk

• Reconcile advance/third‑party data before filing: match CTC/EIP amounts to IRS Letter 6419/6475 or your IRS Online Account; ensure 1095‑A reconciliation if you had Marketplace coverage 1
• Use e‑file with direct deposit and carefully verify identification and bank details; ERO guidance flags ID/SSN/ITIN checks and accurate data entry as key to avoiding rejects 5
• Double‑check math, internal consistency, and all required entries before submitting; the IRS treats many of these as “math errors” that delay or change refunds 3
• Wait to file until you have all W‑2s/1099s and follow the IRS’s “common mistakes” checklist to avoid mismatches and slowdowns 2
• If splitting a refund or using direct deposit, verify routing/account numbers with your bank to avoid rejections or misdirected funds 4
• If you must claim complex credits (for example, research credit, ERTC corrections), file complete, timely, and fully substantiated claims to avoid deferrals and audit expansion 6

If you share your situation (wages, business income, credits you plan to claim, Marketplace insurance, etc.), I can give you a tailored risk‑reduction checklist.

Sources

1 – IRS Newsroom – IR-2022-62 📄 Summarize
2 – Notice 2007-35 📄 Summarize
3 – IRC § 6213(g) 📄 Summarize
4 – IRS.gov – Frequently asked questions about splitting federal income tax refunds 📄 Summarize
5 – IRS – Publication 1345 Authorized IRS e-file Providers of Individual Income Tax Returns 📄 Summarize
6 – IRS.gov – Research Credit Claims Audit Techniques Guide (RCCATG) Credit for increasing research activities Section 41* 📄 Summarize
7 – IRS.gov Tax Topics 📄 Summarize
8 – Treasury Regulation 301.6402-2 📄 Summarize
9 – IRC § 6402(n) 📄 Summarize
10 – IRC § 6695(g) 📄 Summarize
11 – IRS – Publication 5558 Activities Not Engaged in for Profit Audit Technique Guide Internal Revenue Code Section 183 📄 Summarize
12 – IRS – Publication 519 U.S. Tax Guide for Aliens 📄 Summarize
13 – One Big Beautiful Bill Act Sec. 70605. Enforcement provisions with respect to COVID-related employee retention credits 📄 Summarize

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