Although the IRS audit rate is at a 10-year low, certain items on your return will up the odds that your taxes get audited. Avoid the Audit by IRS.
The IRS, due to budget cuts, has way fewer agents to audit your tax return. Also to speed up the e-file process, many tax returns will never be seen by the IRS this year.
This does not mean you should fudge on your tax return though. The IRS can keep your paperwork for up to three years and back audit for up to 7 years. It is not worth it to commit tax fraud. Avoiding the Audit by IRS can be very simple if you follow these simple tips.
Here are some simple tips to avoid being IRS audited:
- Wait until you have all your tax forms. The IRS gets these same forms, so they will know if you did not provide them with all of the information from your forms.
- List all charities instead of summarizing.
- The fewer forms you submit the better, so make sure all of the forms you use are those vital to your tax return.
- Seek CPA guidance, if possible. This will all but eliminate your audit risk.
IRS: Your Chances of Getting Audited Lowest in a Decade
WASHINGTON — Budget cuts forced the IRS to reduce the number of tax audits last year to the lowest level in a decade, IRS Commissioner John Koskinen said Tuesday. And the number of audits could be even lower this year.
The math is pretty simple. There are fewer audits because we have fewer auditors.“The math is pretty simple,” Koskinen said in a speech to the New York State Bar Association. “There are fewer audits because we have fewer auditors.”
“Audits fell in virtually every individual category and across income levels,” Koskinen said. “This continues a long-term trend that carries serious implications for our tax system and the nation.”
Koskinen’s speech comes in the middle of tax season, just as millions of Americans are filing their annual returns.
Last year, the IRS audited 1.2 million individual tax returns. That’s less than 1 percent of the returns that were filed, the lowest rate since 2004.
Koskinen said the IRS is down more than 2,200 revenue agents since 2010. Last year, a little more than 11,600 revenue agents examined returns, and Koskinen is warning that the number of agents will decline again this year.
Congress has cut the agency’s budget by $1.2 billion since 2010. The IRS will receive $10.9 billion for the budget year that ends in September.
Budget Proposal
President Barack Obama has proposed a $12.9 billion budget for the IRS in the coming budget year — about an 18 percent increase. The proposal, however, wasn’t well-received by Republicans who control Congress.
The agency’s budget cuts have come as the IRS is starting to play a bigger role in implementing Obama’s health care law. For the first time, taxpayers have to report on their tax returns whether they have health insurance.
Millions of taxpayers who are receiving tax credits to help pay insurance premiums have to report them as well.
Some Republicans in Congress have vowed to cut IRS funding as a way to stifle implementation of the health care law.
Koskinen has said it won’t work. He said the IRS is required to enforce the law, so other areas will have to be cut, including taxpayer services and enforcement.
The agency projects that about half the people who call the IRS for assistance this filing season won’t be able to get through to a person. The agency is also considering shutting down operations for two days later this year — after tax season — resulting in unpaid furloughs for employees and service cuts for taxpayers, Koskinen said.