What Are Your Chances of Being Audited?

What Are Your Chances of Being Audited?

Focus CPA Focus CPA 0 Comments

What Are Your Chances of Being Audited?

It depends….According to the head of the IRS, John Koskinen “anyone running for President or who’s going to be President can look forward to having their tax returns audited every year.”  The returns of the President and the Vice President are audited every year, as required by section 4.2.2.11 of the Internal Revenue Manual.

If you are not running for President then there is a 1-in-119 chance of being audited.  However more than three-quarters of all audits are handled by mail, not with an IRS agent during an office examination or a field audit.  Small business comes under scrutiny even more.  The IRS estimates that they are under estimating their tax liabilities by $450 billion each year.

So if your return doesn’t include income from a business, rental real estate or a farm, or employee business expense write-offs or earned income credit, the chance of being audited dwindles down to about 1-in-330.

For those honest taxpayers, you’ll be disappointed to learn that the IRS says that every $1 it spends on audits and other “enforcement” activities brings in $4 to the U.S. Treasury.  Personally if the laws were less complicated and easier to follow compliance would increase.

Mary Guldan-Lindstrom

 

Leave a Reply

Your email address will not be published. Required fields are marked *