What are the odds of being audited?
Clients often ask me, "what are the chances I will be audited?" Well here are the numbers from last year, according to the Internal Revenue Service's Fiscal Year 2012 Enforcement and Service Results report, which covered the tax season that ended in April 12, 2012:
Total of All Individual Returns Filed: 143,399,737
Mail/Correspondence Audit: 1,122,216
- Field Audit/In Person: 359,750
- Total Combined Audits: 1,481,966
- 1.03 percent
Total Individuals with Income Under $200,000:
- Mail/Correspondence Audit: 1,012,898
- Field Audit/In Person: 290,015
- Total Combined Audits: 1,302,913
- 0.94 percent
Total Individuals with Income Over $200,000: 4,845,267
- Mail/Correspondence Audit: 109,318
- Field Audit/In Person: 69,735
- Total Combined Audits: 179,053
- 3.70 percent
Total Individuals with Income Over $1 Million: 337,477
- Mail/Correspondence Audit: 23,139
- Field Audit/In Person: 17,826
- Total Combined Audits: 40,965
- 12.14 percent
So what does that mean? Well, as you can see the chances of being audited are less than 1% if you make less than 200k. But that doesn't mean you shouldn't be prepared. Keep all documents that pertain to your tax return and make sure you have the necessary reciepts to backup the deductions you are taking especially those that deal with mileage, meals and contributions as those are areas they often look at.
4/19/2013 02:21:07 am
Is it still 7 years that you need to keep all of your records in case of an audit or has that changed? I'd love to be able to clean out my filing cabinet!
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Chris has been working in the industry for over a decade and has a passion for ensuring her clients have the best service in the area of taxation, accounting and bookkeeping.