Tax deadlines for June 2017
- Second quarterly installment 2017 individual estimated tax due
- Second quarterly installment 2017 estimated tax for calendar-year corporations due
- Individual tax filing deadline for U.S. citizens living or serving in the military overseas
How to Keep Your Audit Fears in Check
Getting audited by the IRS is no fun. However, your chances of being audited are probably lower than you think. A look at the latest IRS statistics for 2016 reveals some interesting and reassuring facts about the risk of an IRS audit.
Audits are becoming less common.
The number of individual tax returns the IRS audited fell to a 12-year low last year, to just above 1 million. Audits have been steeply declining over the last five years, which the IRS commissioner said was due in part to declining budgets and a smaller workforce.
Audits target the rich.
It’s a fact: IRS audits target the super-rich. The statistical chance of being audited increases dramatically for people of higher income levels. Missing data can get you audited. High income isn’t the only thing that gets you audited. Any missing data on your return can also trigger an audit.
Standing out gets you audited.
The IRS takes a close look at business expenses, charitable donations, and high-value itemized deductions. They have statistical data on what amounts are typical for various professions and income levels. If your return stands out from what is “normal,” it may be flagged for review by the agency’s computer system.
More audits are done by mail.
If you face an audit, most likely it will be done by mail. Only about one in four IRS audits are field audits conducted in person by an IRS agent. The most common issues, such as math errors or missing data, are done through mail correspondence.
If your issues are more complicated, you may face a field audit – and you may owe more to the IRS. The average field audit recommended the individual pay an additional tax of nearly $19,000, while the average correspondence audit recommended a payment of less than $7,000.
Most audits end up costing you. You can fight the tax law, but the tax law usually wins. Most people audited by the IRS end up owing additional tax. Only 11 percent of correspondence audits and 8 percent of field audits concluded with a “no change” finding in favor of the taxpayer.
If you are being audited and have questions, give us a call. We’re here to help.