Why the big change in audit risk meter in Turbotax 2021?

[mark859]

I've used TurboTax for more than the last 10 years.  Every year, the audit risk meter has said that my audit risk is LOW.  This year (2021) my tax details are almost identical to the previous year.  But now the audit risk meter is HIGH.  In the details under the risk meter, it gives five reasons for the HIGH rating.  But all five of those reasons were all true last year when it said my risk was low.

Can someone explain why the change and is my risk really drastically higher this year?

[SForrestLO]

The Audit risk meter in TurboTax is a general guideline from the information of what the IRS audits from year-to-year. The IRS may focus on various issues including identity, and self-employed business income and expenses.

Moving to medium risk does not necessarily mean the IRS will audit your return.
These Turbo Tax articles will provide more information.

About the Audit Risk Meter

What's the difference between the Audit Support Guarantee and Audit Defense?

[mark859]

I appreciate you taking the time to respond, but that doesn’t really answer my question. I can’t imagine that the IRS changed so dramatically that someone who has an almost identical tax situation has gone from low risk to high risk in one year.  Something isn't right here. 

[fanfare]

Your audit risk is going down.

IRS does not have the resources to do audits of many tax returns.

auditors are being reassigned to work on the backlog of 24 million unprocessed tax returns.

[mark859]

Yes, but my understanding is that you can be audited for at least three years after filing.  Hard to say if they will still be backlogged three years from now.  

I'd still like to understand why TT has radically changed their audit meter algorithm, when my tax form content has been pretty constant for the past few years and I've always had a LOW risk level on the audit meter prior to this year.

[MarilynG1]

The IRS randomly reviews a small percentage of returns regardless of audit risk. Additionally,

the IRS's focus on audit risk factors changes periodically and is not made public.

As a result, a low reading is no guarantee you won't be audited, nor does a high reading necessarily mean that you will be audited.

Click this link for more info about the Audit Risk Meter. 

[mark859]

Yes, but my question is not about the IRS. My question is about the software product I purchased, called TurboTax.  I have asked the software developer what they changed in their software that caused my predicted audit risk to change from LOW to HIGH.  So far, I have not received a clear answer. 

Are you implying that the IRS drastically changed their audit criteria and you (Intuit) know what that is, you modified your audit meter accordingly, but you aren’t allowed to disclose the new criteria?  If so, then people who get a HIGH result should be aware their audit risk really is higher and should plan accordingly!

But if you aren’t privy to new IRS criteria, then what is the reason for making a change that causes people to be more concerned when there may be no reason to be more concerned than last year.

Your new audit meter listed SIX factors that make me high risk this year. All six of those factors were true in each of my past five returns. But your meter said LOW risk in those years.  I strongly doubt that suddenly the IRS cares about all six of these factors!

[fanfare]

"and should plan accordingly!"

Do you have a plan to reduce audit risk.??

Given the six factors that apply to you, did you do nothing because the risk was LOW

but will do something because the risk is now  HIGH?

It is silly to worry about this since there is not much you can do about it.

If you know otherwise, I need to be ejimicated.

[mark859]

Actually yes.  If my risk is truly high then I will not rely on only one single document of evidence for each of the six identified items. I will take the time to find and download every piece of multiple documentation available to me to eliminate any chance that an auditor could claim insufficient evidence on any of those items. I’ve never been audited, so I don't know if that is really necessary.  But I’m not going to be lazy and not take those extra steps to ensure I am well equipped to defend all the deductions that I am entitled to - if my audit risk is truly high. 

If you’re not going to do anything in response to the audit risk rating, then why bother having an audit risk rating?

[deld]

This crowdsourced, user forum is really becoming a joke! I've had to go the internet with at least 6 questions about TurboTax that either we not answered fully/correctly or the answer was just too hard to find because there are so many irrelevant responses.

I have noted a tendency and am really getting tired of the TurboTax "Experts" to NOT answer people's questions, and instead are either not paying attention or copying and pasting some other "vaguely" relevant information, and this is just another great example. The OP did not ask HOW the meter works, but rather WHAT caused the difference from prior years of almost identical returns. I have a feeling this will get another repeated "canned" result, but am hoping someone actually takes notice and begins taking our questions seriously. We pay a HELL of a lot of cash for this software and should be treated with respect and given direct answers when a question is asked!!!!!

[jk0505ots]

I'm glad to see I am not alone. Like Mark I had the same experience and similar concerns.  After 4 years of using the Premier edition, it was not available at the store I usually buy TurboTax so I used the Home and Business edition this year.  It took my tax information in a different order, but aside from that, the questions seemed to be identical to Premier.   Like Mark, my tax situation doesn't change much from year to year, however instead of the risk meter being near an expected 0-risk , the meter needle was way into the red at what I would call about 90% risk.  

In using a tax program to file taxes, we are basically relying on one "Black Box" the tax program to interface our personal circumstance with another "Black Box" the tax code.  I find the risk meter to provide a warm fuzzy feeling, or apparently a lack thereof,  with respect to achieving some confidence in the effort that just  put-in to avoid using a professional tax preparer!  Naturally I took the risk meter's assessment to heart and went over the input fields with a fine tooth comb.  Found a couple of errors that marginally changed my tax result, but the corrected entries did not budge the meter.  I noticed the program  did not allocate my deductions properly between personal and business use for my residence.  I opted to enter the allocated deduction amounts manually.  This changed my taxes dramatically, but the risk meter still didn't budge!

I would say the algorithm has been changed.  If it can be changed to reflect  year-to-year changes in the tax code or IRS activities, it can certainly be changed to reflect Marketing's whim to sell more of the audit defense product.  I now that I will be buying it this year and the services of a professional tax preparer next year!

[jacs810]

It is too much to hope to get any useful answer from the TT support.

Even the CPAs in intuit are totally incompetent. They send you to the audit defense when issue is about the turbo tax errors and not  about the billing or the tax law.

Intuit is just enjoying the monopoly w/o any accountability.

The kinds of answers we have got here might as well have come from some average intelligent robot. 

[Critter-3]

The truth is that "risk meter" is really just a scare tactic to get you to think you need to buy the audit protection service for an additional fee.   No program can truely guage your risk for an audit since the IRS does some randomly which cannot be factored into any tool.   The IRS doesn't broadcast what they are looking for to be audited from year to year so how can a "tool" possibly know this information in any way.   And of course the program cannot know if the user entered things correctly or followed all the screen instructions properly which can also lead to a possible audit or more likely a review as formal  audits are becoming more rare due to staffing shortages.