The first point worth mentioning is, drive the speed limit, i.e. Do not take aggressive or risky postures on your tax returns, and do your best to keep good books and records. Audits, either paper, or in person, just as our police officer example, are not there to “get” you, only to discover and confirm the facts, in our experience.
So what are the chances of being audited?
Audits, and IRS request for information, most certainly change from year to year, but the IRS does post a Fact Book that reveals the latest statistics from prior years.
We have highlighted a few interesting statistics from the latest year: (IRS reported data for each year will be for tax payer prior reported year i.e. 2009 IRS Fact Book data would be 2008 tax payer returns and data)
Gross Collections of Taxes for All of the United States (Numbers in Thousands 000’s)
2009: $2,345,337,177 (15%) A gross decrease of 15%
Total Number of Returns Filed (Numbers in Thousands 000’s)
Ok, so here are the numbers you have been waiting for as of IRS Fact Book 2009 data:
The highest number of audits on a percentage basis:
No adjusted gross income 4.04%
$1,000,000 under $5,000,000 5.35%
$5,000,000 under $10,000,000 7.52%
$10,000,000 or more 10.6%
The lowest number of audits on a percentage basis:
$75,000 under $100,000 0.57%
$100,000 under $200,000 0.67%
$50,000 under $75,000 0.68%
$25,000 under $50,000 0.70%
Bottom line, drive safe, keep good books and records, and in our experience, you will be in good shape.
Thanks for your time, and have a great day!