Relax, Your Chances of Being Audited by the IRS Have Never Been Lower
I know, I know, the word ‘relax’ is not one you usually hear uttered at tax time. This is without question one of the most stressful times for tax paying Americans. However, things are a little different this year. Amid the scams and lack of IRS resources, you can breath a little easier because your chances of being audited have dropped to record lows.
Lowest Audit Rate In a Decade
According to some recent data U.S.A. Today obtained from the IRS, “Your chances of facing an IRS audit rate dropped to the lowest level in at least a decade in 2014 and are expected to fall further this year.” This information will come as welcome relief to many taxpayers who have been audited in the past or have fears about being audited.
Anyone who has ever been audited probably doesn’t give a hoot as to what has caused the decline. As I mentioned before, one cause is the lack of resources, which U.S.A. Today confirms. “The audit declines coincide with recent drops in IRS funding and a steady falloff in revenue agents.” Can you feel the relief beginning to flow through your veins?
I love sharing this kind of information. The statistics continue, “The IRS audited slightly less than 1.1 million taxpayers with income of less than $200,000 in 2014, a drop from more than 1.4 million in 2010. While nearly 41,000 individuals with annual income of $1 million or more faced audits in 2012, the number of similar audits in that category dropped to just more than 34,000 last year.”
Don’t Do Anything That Will Raise a Red Flag.
Don’t use this information as an excuse to file late, which always throws up a red flag and makes you a more likely candidate for an audit. And don’t use it as an excuse to be cavalier in your claims. Just recognize that if ever there was a time to feel that you are not going to be singled out for an audit, this is probably it. Make sure your taxes are done correctly, by a reputable tax preparer and be sure they are submitted on time.
The Audits are Falling, the Audits are Falling!
Chicken Little would probably be running down the road screaming happily if we didn’t have the Internet to spread the word even faster. The U.S.A. Today article is just full of good, cheery news such as this, “The audit rate, the percentage of individuals’ tax returns IRS revenue agents examined either in person or via correspondence, fell to 0.86% last year, the data show. That represents the lowest rate since at least fiscal year 2005. After rising steadily from 2005-10, the number of IRS audits for individual taxpayers fell 21.4% during the succeeding five years, the data show.”
IRS Commissioner John Koskinen was quoted in the article as recognizing that the IRS is “not the world’s most beloved”, he also warned “that the audit rate decline could eventually “corrode” Americans’ faith in the federal tax system…” He continues to argue for additional budget funding, however it appears that hiring new agents and getting them trained cannot happen until at least 2018.
Even though the IRS would like to recoup as much money as possible through audits, they are simply understaffed and overwhelmed. They’re not going to get it this year. So, really, relax. It may not be much, but you could choose to view the dramatic decline in IRS audits as a form of unintended tax relief. Thank you very much IRS!