Friday, June 5, 2015

The chances of having your tax return audited by the IRS.

The Chances of Being Audited

2014 audit statistics show changes
Every year the IRS publishes the statistics of the number of tax returns they are examining. Provided here are the last three years of published information and a look back to 2008 to see any trends:
Percent of Individual Tax Returns Audited
Fiscal Year2014201320122008
All Individual Tax Returns0.86%0.96%1.03%1.00 %
No Income (AGI)5.26%6.04%2.67%2.15%
Income under $25,000.93%1.00%1.05%.90%
$25,000 - 50,000.54%.62%.70%.72%
$50,000 - 75,000.53%.60%.64%.69%
$75,000 - 100,000.52%.58%.64%.69%
$100,000 - 200,000.65%.77%.85%.98%
$200,000 - 500,0001.75%2.06%1.96%1.92%
$500,000 - $1 million3.62%3.79%3.57%2.98%
$1 million - $5 million6.21%9.02%8.90%4.02%
$5 million - 10 million10.53%15.98%17.94%6.47%
$10 million and over16.22%24.16%27.37%9.77%
Note: These audit rates are stated as a percent of total tax returns in each Adjusted Gross Income (AGI) class as claimed on individual tax returns. In general the examinations are for tax returns filed in the previous calendar year.


Observations:
Overall, you have less than a 1 out of 100 chance of being selected for an audit. The .86% audit rate is down .10% versus 2013.
Audit rates are down for all income levels versus 2013 due to resource constraints per the IRS. The IRS claims this translates into the potential loss of $2 billion in tax revenue. However, the audit rates for those with incomes over $500,000 is still up dramatically when compared to 2008.
The IRS is continuing its focus on returns with no AGI or negative income. This group's 5.26% audit rate is significantly over the 2.15% audit rate in 2008.


 

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