Common Audit Triggers
| Trigger | Why It Raises Flags |
|---|---|
| Large tax-free stipends | The IRS wants to verify you qualify |
| No documented tax home | Without proof of a permanent residence, stipends are taxable |
| Excessive deductions | Deductions that seem high relative to income |
| Multi-state filing inconsistencies | Income reported differently across state returns |
| Missing W-2/1099 reconciliation | Discrepancies between what agencies report and what you file |
| High mileage claims | Without contemporaneous logs, mileage deductions are denied |
Document Retention
The IRS generally has 3 years from your filing date to audit a return (6 years if they suspect substantial underreporting). Tax professionals generally recommend retaining records for at least 3 years, and up to 6 years for travel nurse documentation.What to Keep
| Document | Purpose | Retention |
|---|---|---|
| W-2s and 1099s | Income verification | 6 years |
| Assignment contracts | Proves temporary work arrangement | 6 years |
| Lease / mortgage statements | Tax home proof | 6 years |
| Rent receipts | Ongoing payment proof | 6 years |
| Utility bills | Home is occupied, not vacant | 3 years |
| Expense receipts | Deduction substantiation | 3 years |
| Mileage logs | Vehicle deduction proof | 3 years |
| Voter registration / DL copies | Tax home ties | 6 years |
| Travel receipts (return trips) | Proves regular tax home visits | 3 years |
Building Your Defense
1. Establish Your Tax Home Early
TaxHomeBase’s Tax Home feature lets you document your permanent residence from the start. The IRS gives more weight to contemporaneous evidence — documentation created at or near the time of the events.2. Track Everything as It Happens
- The IRS values records made at or near the time of each event
- Receipt uploads and mileage logs are strongest when created the same day
- Updating visit dates promptly creates a contemporaneous record
- Monthly tax home cost tracking builds a consistent paper trail
3. Monitor Your Compliance Score
TaxHomeBase’s 11-point audit readiness score checks:- 7 core tax home criteria
- 4 documentation completeness criteria
4. Reconcile Income Documents
Use the Income Documents page to:- Track expected W-2s/1099s per agency
- Upload documents as they arrive
- Reconcile reported wages against your tracked income
- Flag discrepancies (>1% variance)
5. Export Your Package
Before filing, generate your Audit-Ready Tax Package:- PDF — Summary, state breakdown, audit defense checklist, GSA compliance, mileage log
- CSV exports — Expense detail, state income breakdown, mileage log
- ZIP download — Everything bundled together
If You’re Audited
- Context — Correspondence audits (by mail) are the most common and least invasive type
- Deadlines matter — The IRS typically gives 30 days to respond; extensions may be available
- Professional help — A CPA specializing in travel nurses understands the specific rules and can represent you
- Organized records help — TaxHomeBase’s export package organizes documentation in an audit-friendly format
- Scope — Tax professionals generally advise responding only to what is specifically requested