Turning 65 often marks a major shift in financial life. Retirement income replaces wages, Social Security starts paying out, and Medicare becomes a primary form of healthcare coverage. For many retirees, the assumption is that their tax returns will become simpler. Unfortunately, the reality is often the opposite—especially when it comes to IRS scrutiny.

While an “audit” might sound intimidating, what the IRS calls a “review” can be triggered for many reasons. These reviews don’t always mean you’ve done something wrong, but they do mean the IRS wants a closer look at certain details. For older taxpayers, that can lead to extra paperwork, delayed refunds, or even back taxes if an error is found.

Here are nine common situations that can lead to an IRS review after age 65—and what you can do to reduce the risk.

9 Triggers That Can Lead to an IRS Review After Age 65

1. Reporting the Wrong Amount for Social Security Benefits

Social Security benefits may not be fully taxable, but they’re not always tax-free either. The IRS uses a formula based on your “combined income” (adjusted gross income + nontaxable interest + half your Social Security benefits) to determine whether a portion of your benefits should be taxed.

If you miscalculate or leave out part of your benefit income, it can raise a red flag. The IRS receives Form SSA-1099 directly from the Social Security Administration, so any mismatch between what you report and what’s on that form will trigger a review. Many retirees accidentally underreport because they forget to include benefits from the first or last months of the year, or they mistakenly report the net amount after Medicare deductions rather than the gross benefit.

Prevention tip: Always use the numbers from your official SSA-1099 form and double-check your tax software entries. If you’re unsure about how much of your Social Security is taxable, use the IRS worksheet or consult a tax preparer.

2. Forgetting to Report Required Minimum Distributions (RMDs)

Once you hit a certain age (currently 73 for most retirees), the IRS requires you to withdraw a minimum amount from traditional IRAs, 401(k)s, and certain other retirement accounts each year. These required minimum distributions (RMDs) are fully taxable in most cases.

The IRS gets a copy of Form 1099-R from your retirement plan administrator. If you fail to take an RMD or forget to report it on your tax return, the mismatch will almost certainly trigger a notice. Even worse, missing an RMD can lead to steep penalties—currently 25% of the amount you should have withdrawn, though it can be reduced to 10% if corrected quickly.

Prevention tip: Mark your calendar with your RMD deadline each year, and make sure the full amount is reported on your tax return. If you realize you missed an RMD, contact your plan administrator immediately and file Form 5329 to request a penalty waiver.

3. Large, Unusual Charitable Deductions

Retirees often increase charitable giving, especially if they’re no longer supporting children or paying a mortgage. While generosity is admirable, claiming unusually large charitable deductions compared to your income can raise suspicion with the IRS.

For example, if you report $40,000 in income but claim $20,000 in charitable deductions, the IRS may want to see proof. This is particularly true if your donation amounts suddenly spike compared to previous years. The IRS will expect receipts, bank statements, and, for larger donations, appraisals.

Prevention tip: Keep thorough records for every donation, especially non-cash items. If you donate appreciated assets, consult a tax professional to make sure they’re reported correctly.

4. Sudden Changes in Income Reporting

Retirement often means income sources shift, but dramatic year-to-year changes can catch the IRS’s attention, particularly if they involve a sudden drop in taxable income without a clear reason. For example, going from $100,000 in taxable income one year to $25,000 the next could be legitimate, but it could also signal unreported income.

The IRS uses computerized systems to compare your current return with past years. Any large discrepancies will likely prompt a closer look. This is especially true if you have investment income that appears to vanish without explanation.

Prevention tip: If your income changes dramatically due to retirement, asset sales, or other life events, keep supporting documentation and consider including an explanatory statement with your return.

5. Not Reporting Investment or Rental Income

Many retirees continue to earn money from investments, real estate, or side businesses. All of these income sources generate tax forms—1099-DIV for dividends, 1099-INT for interest, 1099-B for stock sales, and Schedule E for rental income. The IRS gets copies of all these forms.

If you fail to include them on your return, the mismatch will trigger a notice or review. Even small amounts of unreported income can cause problems, especially if it appears you’ve deliberately left it out. For retirees with multiple brokerage accounts or property managers, it’s easy to miss a form if you’re not organized.

Prevention tip: Wait until you’ve received all your 1099s before filing, and cross-check them against last year’s return to make sure you haven’t overlooked a source of income.

6. Claiming Medical Deductions Without Proof

Older taxpayers are more likely to have significant medical expenses, and the IRS allows deductions for qualifying costs that exceed 7.5% of your adjusted gross income. However, large medical deductions without adequate proof can lead to a review.

The IRS looks for excessive or suspicious claims, such as cosmetic procedures, unapproved treatments, or expenses that don’t qualify. They also check whether your claimed amounts line up with your reported income.

Prevention tip: Keep itemized receipts, doctor’s statements, and insurance records for all claimed medical expenses. If you’re not sure an expense qualifies, check IRS Publication 502 before including it.

7. Frequent Large Cash Transactions

While cash isn’t inherently suspicious, large or frequent cash deposits, withdrawals, or purchases can attract IRS attention, especially if they don’t match your reported income. Financial institutions must report cash transactions over $10,000, and patterns of just-under-the-limit activity can also raise eyebrows.

For retirees, this can happen if you sell personal items, receive large gifts, or cash out investments. If the IRS can’t match the source of the funds to your reported income, they may initiate a review to ensure you’re not omitting taxable income.

Prevention tip: Document the source of any large cash amounts and be ready to explain them. If the funds aren’t taxable, keep proof of that as well.

8. Early Withdrawals From Retirement Accounts

Taking money from your IRA or 401(k) before age 59½ generally triggers a 10% penalty unless you qualify for an exception. But even after retirement age, withdrawals can cause confusion if not reported properly. For example, converting a traditional IRA to a Roth IRA is taxable, and the IRS will expect to see it on your return.

Retirees sometimes assume certain withdrawals are tax-free when they’re not, which can lead to underreporting and an IRS notice. The IRS gets a copy of Form 1099-R for every retirement account distribution, so mismatches are quickly flagged.

Prevention tip: Review the tax treatment of any planned withdrawals before you take them. If you’re unsure, get advice from a tax professional to avoid accidental underreporting.

9. Failing to Report State or Local Taxable Events

While the IRS focuses on federal taxes, state-level tax events, like selling property or winning a lottery, can ripple upward. States often share information with the IRS, and if there’s a mismatch between what you report at the state and federal levels, it can trigger a review.

For retirees, this often happens when selling a vacation home, receiving a large pension payout, or winning a prize in a local contest. Even if your state tax rules differ from federal rules, the IRS still expects consistency in reporting taxable events.

Prevention tip: Ensure your federal and state returns tell the same financial story, even if certain income is only taxable at one level.

Staying Audit-Proof in Retirement

Once you’ve passed 65, the IRS doesn’t necessarily target you more, but your tax return often becomes more complex, which increases the odds of a review. Social Security, RMDs, investment income, and deductions all create potential mismatches if not reported precisely.

The best way to avoid trouble is to keep meticulous records, file accurately, and understand which transactions are taxable. While no one can guarantee they’ll never be reviewed, you can drastically reduce the chances by staying organized and proactive.

If the IRS sent you a letter tomorrow asking for proof of every deduction and income source, could you produce it without scrambling?

Read More:

The IRS Can Now Touch More Than Your Bank Account: Here’s What You Should Know

7 Little-Known Tax Credits That Seniors Often Miss

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