According to Forbes, the number of audits performed by the IRS is now at the lowest level we’ve seen in 11 years. The current number of individual taxpayers who get audited each is year is only 0.84% of the population that files taxes, meaning that there’s only a 1 in 100 chance that you’ll be the one going through the auditing process. While odds might be in your favor, there’s still a chance that you could be targeted.
If you do face an audit, the IRS could approach the issue in a number of ways. Sometimes an agent might visit your home. In other cases, you might receive a phone call or letter in the mail alerting you that you are being audited. Some individuals receive a letter in the mail stating that an audit was completed in house and they owe thousands of dollars more than expected. In these situations, your only option is an audit reconsideration cases, which can be long and arduous.
If the IRS had its way, it would increase the number of audits it performs each year, but right now it simply doesn’t have the resources. Currently, the organization is dealing with 22% fewer agents than it once had and the lower number of agents means a significant drop in the number of audits conducted.
However, the decreased number in overall audits might not be a good thing for you. When tax payers know that the odds of facing an audit are slim, they are more likely to cut corners or flat out cheat on their taxes.
In years past, the higher your gross income was, the better the odds were of you getting audited. For example, if you made $25,000-$49,999 in 2009 there was a 0.72% chance of you getting audited. But if you made $5,000,000-$9,999,999, the odds of an audit went up to 6.47%. It’s likely that the IRS will still audit individuals in a higher tax bracket first because they could potentially recover more revenue.
As the number of audits decline, the federal government will have even fewer funds available and will be forced to cut funding to other programs, including some that have a direct impact on your life. At some point, when they realize more taxpayers are cheating, the IRS will increase the number of audits they conduct each year at which point you might be one of the taxpayers that gets targeted.
The best way to handle your upcoming tax return is to approach the situation as if you will be audited. If you convince yourself that the IRS will be looking very carefully at your paperwork and might have some questions for you, it decreases the likelihood that you could make a mistake that could land you in Tax Court.
If you happen to be one of the unlucky few that gets selected by the IRS for an audit, you shouldn’t panic. You also shouldn’t try to handle the matter on your own. You need a tax audit attorney on your side. The tax audit attorney will make sure the IRS is not violating any of your civil rights. They’ll make sure the matter gets handled in a timely fashion. If the audit reveals you owe back taxes, the tax audit attorney will help arrange a reasonable settlement that won’t completely destroy your finances or hinder you from meeting your current obligations. To learn more about how an tax audit attorney can help you, visit IRSmedic.com.