An IRS Tax Audit can be one of the scariest situations a person or business can face. Often times the IRS has a distinct advantage because the average person doesn’t know enough tax law to defend him/herself against an audit. Every year the IRS publishes the statistics of who they are examining. :
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Audit Rate Statistics for INDIVIDUALS |
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Fiscal Year Year |
2012 |
2011 |
2010 |
2008 |
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All Individual Tax Returns |
1.03% |
1.11% |
1.11% |
1.00 % |
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No Income (AGI) |
2.67% |
3.42% |
3.19% |
2.15% |
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Income under $25,000 |
1.05% |
1.22% |
1.18% |
.90% |
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$25,000 – 50,000 |
.70% |
.73% |
.73% |
.72% |
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$50,000 – 75,000 |
.64% |
.83% |
.78% |
.69% |
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$75,000 – 100,000 |
.64% |
.82% |
.64% |
.69% |
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$100,000 – 200,000 |
.85% |
1.00% |
.71% |
.98% |
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$200,000 – 500,000 |
1.96% |
2.66% |
1.92% |
1.92% |
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$500,000 – $1 million |
3.57% |
5.38% |
3.37% |
2.98% |
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$1 million – $5 million |
8.90% |
11.80% |
6.67% |
4.02% |
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$5 million – 10 million |
17.94% |
20.75% |
11.55% |
6.47% |
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$10 million and over |
27.37% |
29.93% |
18.38% |
9.77% |
| Note: These audit rates are stated as a percent of total tax returns with “total positive income” (TPI) as claimed on individual tax returns. In general the examinations are for tax returns filed in the previous calendar year.Source: IRS Data Books | ||||
Observations:
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After dramatic audit increases in incomes over $200,000 during 2011, the audit rates have come down slightly, but still at least 2x the rates in 2008. |
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Those with incomes over $10 million will have a 1 in 4 chance of being audited. |
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Automatic spending cuts from sequestration could impact the audit rates in 2013. How far they will drop is anyone’s guess. |
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It is also unknown what the 2013 tax increases for those with incomes over $250,000 will do to audit rates as more of the total revenue collected will come from these upper income groups. |
Our practice has years of experience defending taxpayers in their audits. Each case is handled individually, and analytically reviewed and prepared for by an experienced CPA. Our expertise is a result of or years of experience defending our clients against the IRS.
For help with IRS, tax audits, tax problems, back taxes, tax settlements, tax debt, Offer in Compromise, tax help, IRS debt, a tax lien, a state tax levy, an IRS levy, an IRS tax lien, contact us. If you need IRS help and have unresolved cases with previous tax lawyers and tax attorneys, we can help find an optimal resolution for your indigenous needs. Contact us at 201-947-8081 or 646-688-2807, or email us at info@irstaxproblems.com.
