The Chances of Being Audited

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:

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Observations:

arrowOverall, 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.

arrowAudit 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.

arrowThe 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.

Having good records

Always retain your tax records and support documents for as long as they may be needed to substantiate your tax return. This is usually three years after the filing due date or when the tax return was actually filed (whichever is later). Include any state record retention requirements as you review when it is safe to destroy old records. Remember some records need to be retained indefinitely. This includes, at minimum, copies of original tax returns, legal documents, confirmation of asset purchases, asset sales, and real estate transactions.

 

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