IRS Audits Meet AI: What OBBB Just Changed

Two things tend to make people nervous:

😱 IRS audits

🤖 Artificial Intelligence

And now… they’ve joined forces.

For decades, the IRS has used something called the DIF (Discriminant Index Function). Every tax return gets a DIF score — and the higher your score, the higher your chance of being audited. DIF compares your numbers to the “norms” for taxpayers like you.

In many ways, that was the IRS’s first version of AI — a rules-based system built on patterns and probabilities.

💡 What Changed Under OBBB (One Big Beautiful Bill)

The One Big Beautiful Bill has completely transformed the IRS’s audit process. Here’s what’s new:

✔️ More data points. Additional checkboxes on Form 1040 and expanded disclosures for business owners and investors give the IRS more details than ever before.

✔️ Smarter algorithms. The IRS has upgraded from DIF to full-scale AI-powered audit tools capable of spotting patterns and cross-matching data across multiple systems.

✔️ Wider audit reach. Even if your return looks “clean,” AI’s expanded scanning power means more returns will be reviewed.

⚠️ Why AI Audits Can Be a Problem

The challenge is that AI doesn’t always understand context.

A simple inconsistency or missing record might look suspicious to an algorithm — even if it’s completely legitimate. That can lead to more false positives, more letters from the IRS, and more stress for honest taxpayers.

The future of audits isn’t just about dollars anymore. It’s about data consistency — making sure your books, records, and tax returns all tell the same story.

🧭 Your Best Defense: Records, Books, and Strategy

Good documentation has always been important. But in an AI-driven audit world, it’s absolutely essential.

Your books must be accurate, complete, and perfectly aligned with your tax return. Any discrepancies — even small ones — can raise red flags.

That’s where Belshaw Accounting can make a difference.We help business owners and families keep their financial records clean, compliant, and strategically prepared — not just for tax season, but for whatever changes the IRS rolls out next.

Our goal is simple: to give you clarity, confidence, and peace of mind, knowing your numbers tell the full story — accurately and consistently.

Let’s Make Sure You’re Audit-Ready

The IRS is getting smarter — but so can you.Belshaw Accounting helps you stay one step ahead with organized books, thoughtful planning, and personal guidance you can rely on.

📅 Schedule a confidential Tax & Bookkeeping Review today to strengthen your records, identify potential red flags, and ensure your return stands up under any level of scrutiny.

Because at Belshaw Accounting, we don’t just help you file —we help protect what you’ve built for your family.

👉 Book Your Review with Belshaw Accounting