How Likely Are You To Be Audited?

Statistics for Individuals

Unfortunately, the IRS increased its rate of auditing individuals in 2003 when compared to 2002. The increase was approximately 14%, but still constituted only 6.5 audits for every 1,000 taxpayers. Put another way, the risk of being audited on your personal return is less than 1 in 100.

In regard to the above numbers, it is important to note that the IRS pursued a large number of "correspondence audits" instead of face?to?face meetings. As the name suggests, these audits consists of correspondence being sent from the IRS to a taxpayer regarding a contested issue. The taxpayer can respond to the audit or pay the accessed amount depending upon the request of the IRS.

Favorable Audit News For Businesses

The audit rate for businesses is much lower than those for individuals. In 2002, the IRS audited roughly 2.2 out of every 1,000 businesses. In 2003, this rate dropped slightly to 2.1 out of every 1,000 businesses.

The IRS has attributed the decline in business audits to the "explosive growth" in tax shelters, which requires the Agency to pursue more expensive and time consuming audits due to the complexities involved in the plans. The Agency reported pursuing more than 2,200 such shelters in 2003, which the audits taking an average of 7 1/2 months longer than normal corporate audits.

Audit Risk

Whether you are a business or individual taxpayer, your risk of being audited is very low. The nominal risk, however, is not a license to pursue frivolous deductible claims on your returns. As long as you stick to valid deductions, you should be able to sleep without much concern.

Richard Chapo is CEO of http://www.businesstaxrecovery.com - Obtaining tax refunds for small businesses by finding overlooked tax deductions and credits through a free tax return review.

In The News:

How High-Tax Countries Tax  BloombergThey don't tax wealth much, their income taxes are high but not very progressive, and they rely a lot on consumption taxes.
I owe how much? Americans are shocked by the impact of Trump's tax law  CNBCThe first tax filing season under the new federal tax law is proving to be surprising, confusing — and occasionally frightening — for some Americans.
Bill Gates: Taxes on rich should be 'much higher' but capitalism still works — here's why  CNBC"My vote will be not to make a radical change" to the economic system of the United States Bill Gates told CNN's Fareed Zakaria.
Government relaxes norms, investment limit for angel tax concession to startups  Times of IndiaIndia Business News: A notification regarding simplifying the process for startups to get exemptions on investments under section 56(2)(viib) of Income Tax Act, ...
Do your taxes for cheap! H&R Block Tax Software Deluxe is on sale for just $18  PCWorldThe tax deadline is still a few months away, but this deal for H&R Block Tax Software Deluxe can't be missed.
There's still time to slash your 2018 taxes. Here's how  MarketWatchHere are 4 maneuvers you can make to lower your tax bill before the April filing deadline.
Does Amazon pay ‘$0’ in taxes?  The HinduFor 2018, the tech giant reported owing $322 million in taxes to U.S. State governments and another $563 million in the rest of the world.
Your parents, wife and children can help you save taxes. Here's how  Economic TimesSalaried individuals can save tax by paying rent to their parents and availing the HRA exemption benefit.
Fact-check: Does Amazon pay '$0' in taxes?  Times NowAmazon found itself in the headlines after suddenly pulling out of a planned New York City corporate expansion amid controversy over local tax incentives that ...
Budget 2019: No marginal relief for taxpayers whose taxable income exceeds Rs 5 lakh  Economic TimesAlthough the interim budget 2019 has made income up to Rs 5 lakh tax free, the marginal increase in income above Rs 5 lakh will result in more tax outgo than ...
Taxes for senior citizens: Here's a list of benefits and exemptions available  Moneycontrol.comSeniors can claim deduction of up to Rs 50000 p.a. for medical expenses and/or health insurance premium.
High Dividends, Low Taxes: A Careful Investor's Guide To Preferred Stocks  ForbesLooking for a stodgy, somewhat safe and tax-favored income stream? Certain preferred stocks fit the bill. We'll show you which ones.
Budget 2019: Only those with income up to Rs 5 lakh to pay no tax, rates remain same for all others  Economic TimesUnion Finance Minister Piyush Goyal in his interim budget 2019 has proposed that individuals with taxable income up to Rs 5 lakh will get full tax rebate under ...
10 states that are the most tax-friendly for middle-income households  CNBCTired of high income taxes? Consider packing up and heading for Alaska, Delaware or Nevada. Here's a list of the 10 most and least tax-friendly states for ...
Tax the rich, but bring in only progressive reforms: Bill Gates  Moneycontrol.comCongresswoman Alexandria Ocasio-Cortez has supported the idea of taxing income over $10 million at 70 percent, which is currently 37 percent.
Married lesbian couple turned away by Indiana tax preparer  NBCNews.comThe tax preparer said she had denied the couple services because she's "a Christian" and believes "marriage is between one man and one woman."
Want lower taxes? Cut pensions, benefits, aid to some schools, former candidate for governor says  NJ.comGov. Murphy, this is no time to pay for more things we can't afford.
5 tax breaks you can't get anywhere but the US  Business InsiderSome tax deductions and tax credits for businesses and individuals are unique to the United States tax code.
Government tweaks Startup definition, raises angel tax exemption limit. Check details  Times NowNow an entity will be considered as a Start-ups up to a period of ten years from the date of incorporation and registration. This period was earlier used to be 7 ...
Putting the 'Trump tax cuts will pay for themselves' myth to bed | TheHill  The HillInstead of using tax reform as an opportunity to raise this revenue, however, we used it as an excuse to cut taxes.
Tax case: McKinsey has KPO in India not BPO, says Supreme Court  Economic TimesIn a setback to the global white shoe consulting firm the Supreme Court rejected a special leave petition (SLP) filed by McKinsey Knowledge Centre against a ...
Tax on sugary drinks tops Lamont's list of new 'sin taxes'  The CT MirrorGov. Ned Lamont's first budget will include a series of new “sin tax” proposals, including levies on sugary drinks, electronic cigarettes and plastic bags, and ...
Angel tax exemption may be hiked to Rs 25 crore  Economic TimesAngel tax is a term used to refer to the income tax payable on capital raised by unlisted companies via issue of shares.
GoM favours uniform tax on lottery, GST Council to decide rate on February 20  Economic TimesNEW DELHI: A state ministerial panel set up to review tax rate on lottery Monday favoured a uniform GST rate of either 18 per cent or 28 per cent -- a final call on ...
‘Accredited’ tag may still not save startup angels from tax  Economic TimesBENGALURU: The Central Bureau of Direct Taxes (CBDT) is unlikely to allow startups that have raised money from 'accredited investors' to be exempt from ...
Minnesota Gov. Tim Walz proposes gas tax hike, more money for schools, roads  Star TribuneRoads and bridges, schools and affordable health care coverage are top priorities in Gov. Tim Walz's $49.5 billion budget proposal. The new Democratic ...
It’s income tax time: CRA opens electronic filing service for 2018 returns  Global NewsThe deadline to file your taxes is April 30, but there are a few advantages to getting your paperwork in much sooner.
Watch Out. Tax Season Is Even More Stressful Than Usual.  The New York TimesWith millions of people filing tax returns under a new tax law and after a long government shutdown, this is a challenging year. We offer survival tips and ...
MSPs approve Scottish government income tax plans  BBC NewsMSPs have voted to approve the Scottish government's income tax plans for the coming year. Finance Secretary Derek Mackay chose not to pass on a tax cut ...
Harshad Mehta scam: Family free of over Rs 2,000cr income tax demand after 27 years  Moneycontrol.comThe tax refunds following favourable court orders would eventually pave the way for the custodian to release the assets of the Mehtas.
Rubio’s Smart Push to Change the Tax on Buybacks  BloombergThe stock market dipped over Senator Marco Rubio's proposal to change how investors are taxed when companies buy back shares. This knee-jerk reaction ...
The 8 Most Common 2019 Tax Return Questions, Answered by Experts  The New York TimesThe most important changes to the tax code in decades have taken effect — and filers are confused. We asked CPAs and other tax-prep pros to simplify things.
India exempts small firms from angel tax to promote business  Moneycontrol.comUnder new rules, ventures that have raised up to 250 million rupees and registered with the Department for Promotion of Industry and Internal Trade will be ...
New Zealand plans new tax for giants like Google, Facebook  ETTelecom.comNew Zealand's government announced plans on Monday for a new tax targeting online giants like Google and Facebook that earn plenty of money in the cou..
The U.S. Cut Taxes. Why Will Fewer Folks Get Refunds?  BloombergU.S. taxpayers are filing their first returns under the 2017 tax code overhaul that lowered rates for most people. What makes the paperwork headaches tolerable ...
Cashed-up retirees getting a refund for tax they never paid? We've hit peak rort  The GuardianSome of the wealthiest Australians pay negative tax and still get to call themselves self-funded.
Bill Gates says tax policies like Alexandria Ocasio-Cortez’s are ‘missing the picture’  The VergeSpeaking on The Vergecast this week, Gates said that while marginal tax rates in the United States can be "more progressive" there are now some politicians ...
Thanks To Trump Tax Law, The Time Is Ripe For This Roth Conversion Retirement Trick  ForbesBetween Trump's temporary tax cuts and the stock markets downswings, now could be the time to do a Roth conversion.
4 Overlooked Tax Deductions That Could Save You Big Bucks  The Motley FoolTax season is upon us again, and with it comes a raft of deductions that can save you money and pump up any refund you may get from the Internal Revenue ...
Program allows monthly property tax payments for Detroit homeowners  WDIV ClickOnDetroitSome homeowners in Detroit can set aside money each month toward their summer and winter tax bills instead of having to fork over the total amount at one ...
Tax Department Seeks To ‘Examine’ Tribunal Orders Against It  BloombergQuintA recent office memorandum issued by the Central Board of Direct Taxes has perturbed tax practitioners across the country. The CBDT has set up a committee of ...
A wealth tax is a bad idea  CNNDavid A. Andelman, drawing on several European examples, writes that Elizabeth Warren's proposed wealth tax in the United States would likely be an ...
Income tax e-filing alert: Never share PIN, OTP, credit, debit card info, beware of fraud SMS, phishing emails  Times NowIncome Tax Department never asks for a PIN, OTP, password or access to similar information such as credit cards, debit cards, net banking details through ...
From tolls to the grocery tax, here’s what’s in and what’s out of Gov. Lamont’s budget  Hartford CourantWhat's in Connecticut Gov. Ned Lamont's budget and what's out?
MPs call for 1p clothing tax and darning classes in schools to cut waste  The GuardianUK fashion industry bigger source of carbon emissions than aviation and shipping.
How did Netflix get away with not paying income tax in 2018?  The GuardianThe company posted its largest ever profit in 2018 – $845m – but paid no federal (or state) income tax, and there are a few clues as to why.
How can we tax the footloose multinationals?  The GuardianApple and companies like it claim to be socially responsible, but that should mean paying your fair share of tax.
The 70% top tax rate, explained with potatoes  Vox.comA few weeks ago, Rep. Alexandria Ocasio-Cortez (D-NY) suggested that the top tax rate for the very rich should be 70 percent. The current top income tax rate is ...
Tax planning for 2019-20: Know what interim Budget offers to reduce your tax outgo  Times NowBudget 2019 came in full swing even though it was an interim one. With the announcement of full tax rebate for the salaried individuals earning up to Rs 5 lakh in ...
10 Tax Breaks for the Middle Class  Kiplinger's Personal FinanceThere are plenty of tax breaks available only for middle- and low-income Americans -- and, in many cases, tapping into them is far easier than the accounting ...
All Talk, Little Action: What to Expect on Tax Policy This Year  The New York TimesDon't count on big changes. But the heated debates in Congress and on the 2020 campaign trail give clues about legislation to come.
Proposed tax changes could have a big impact on U.S. citizens living in Canada  The Globe and MailIf the new bill passes, it would give non-resident U.S. citizens exemptions from paying taxes in the U.S. on their foreign income.
Karnataka businessman jailed for income tax default of Rs 7.35 crore  The News MinuteA Karnataka-based businessman has been jailed for six months for allegedly not filing his income tax arrears and interest of around Rs 7.35 crore despite ...
3 tips to help you boost your tax-free income in retirement  CNBCSometimes the best things in life are tax-free. Roth 401(k) plans allow you to pay taxes on your savings now, so that you can enjoy tax-free growth and retirement ...
Tax ombudsmen abolished: Experts raise concern  LivemintIn the absence of the tax ombudsmen, taxpayers should be alert to the structure of the available alternative grievance systems and their limitationsGovt said the ...
The tax rebate proposal promotes inequity  BusinessLineThe interim Budget's tax proposals have led to certain anomalies, that must be corrected in the full Budget.
Notional rent: How to calculate it and how much tax do you pay?  LivemintNotional rent was introduced to discourage taxpayers from leaving houses vacant and create supply of properties for tenantsNotional rent is calculated using the ...
Just who are the taxpayers?  Bangalore MirrorIndia has one of the worst ratio of taxpayers to voters . If we want to become a developed country, we need more people filing taxes. Have you wondered how ...
These three tax breaks for 2018 are still up in the air  CNBCWhether you own a home or you're shelling out for higher-education costs, Congress has yet to approve a package of breaks known as tax extenders.
New tourist taxes from Venice to Bali aim to curb overtourism  QuartzCountries and cities have generally tried to encourage tourism—based on the premise that holidaying visitors and the money they spend fosters economic ...
Sacco savers dividends drop as tax takes effect  The Star, KenyaKenya Police Sacco chairman David Mategwa presents a gift to National Police *Service* Commissioner Mary Owuor (L) as Commissioner of Cooperatives Mary ...
These red flags on your 2018 tax return could spark interest from the IRS  CNBCMost taxpayers will never face an audit or even receive correspondence from the IRS. Nevertheless, certain things on tax returns generate more attention from ...
No tax liability if your income is up to Rs 9.5 lakh, but conditions apply  Business StandardStressing that tax concessions have been provided with a view to help poor and middle-class people living on a tight budget, Finance Minister Piyush Goyal on ...
The tax code treats all 1 percenters the same. It wasn’t always this way.  The Washington PostWhen we debate income tax policy in the United States, we typically focus on what's in the chart above, which shows the top marginal tax rate from 1913 to the ...
Filing Taxes on Your Phone? Insert Frustrated-Face Emoji Here  The New York TimesMillions of people are expected to submit their returns via mobile platforms this year. I won't be one of them.
The impact & significance of tax changes  Economic TimesThe only sector that saw substantive changes in the Finance Bill was real estate.
Alphabet's Sidewalk Labs wants a cut of Toronto taxes to build a smart city there  CNBCAlphabet's Sidewalk Labs proposed taking a portion of Toronto property taxes, development fees and increased land value to build a smart city on the eastern ...
Hyderabad HC rejects RTA's plea on life tax on vehicles' ex-showroom price  ETAuto.comRuling in favour of vehicle buyers and dealers, the high-court of Hyderabad have rejected the road transport authority (RTA) plea to collect life tax ..
New Hampshire House Subcommittee Approves Bitcoin for Taxes Bill  Bitcoin NewsDuring the first week of the new year, two U.S. representatives from New Hampshire, Dennis Acton and Michael Yakubovich, proposed a bill that would allow ...
How Republicans bought their own tax cut snake oil  The Washington PostWhy won't those rubes realize what a favor we did them?
The new tax law has a bunch of changes. Here's what you need to know as filing season begins  CNBCIt's time to sharpen your pencils and work on that 2018 income tax return. Just make sure you understand the new tax law first. After one year under the Tax Cuts ...
Medical expenses that can be claimed as tax break under section 80DDB  Economic TimesThe deduction under section 80DDB can be claimed irrespective of whether you have paid a premium for a health insurance policy or not.
How Much Do You Have to Make to File Taxes in 2019?  TheStreetYour income, filing status and age all play a role in whether you have to file a tax return and what your requirements are. Here's what you need to know.
Budget 2019: Income up to Rs 5 lakh can pay zero tax but still need to file ITR  Economic TimesIf you thought that having a taxable income of up to Rs 5 lakh meant bye-bye to the tax department think again. You can avail of the zero tax benefit announced ...
4 Reasons Your Tax Refund Could Be Larger Than Last Year's  The Motley FoolTax reform won't boost everyone's refund, but here are some of the reasons you could get a bigger check.
After 27 years, Harshad Mehta and family free of tax cloud  Economic TimesMUMBAI: After 27 years of tortuous battle, involving claims, counter-claims, and cross-appeals, the income tax tribunal has scrapped almost the entire tax ...
N.J.'s celebrity tax evaders: 16 famous faces who had to pay up  NJ.comA look at some of the most high-profile tax dodgers in state history.
ND House passes bill to reduce income taxes for veterans  INFORUMBISMARCK — A bill to create an income tax reduction for veterans in North Dakota passed the state House on Monday, Feb. 18, despite a “do not pass” ...
Federal tax changes could be why California’s budget is more than $2 billion below projections  Los Angeles TimesGov. Gavin Newsom's prediction of a record tax windfall for California's budget might hinge on whether the 2017 federal tax overhaul has simply left high-income ...
Tax queries: How much of my gratuity amount is tax-exempt?  Economic TimesDilip Lakhani, Senior Chartered Accountant, answers queries from our readers on income tax and other levies. I retired from a bank on Oct 1, 2018. My gratuity ...
Tax guide for YouTube bloggers: Here's how to determine your income tax liabilities  Moneycontrol.comYou will be taxed as a sole proprietor unless you register your business as a company, LLP or Partnership Company.
Huge Tax Relief For Harshad Mehta Family As ITAT Orders Deletion Of Rs.2014 Crores From Income [Read Order]  Live LawThe Income Tax Appellate Tribunal, Mumbai Bench has set aside the addition of nearly Rs.2014 crores to the income of late Harshad Mehta, who was the lynch ...
Smaller Tax Refunds Surprise Those Expecting More Relief  The New York TimesMany early filers under President Trump's tax plan are surprised that their refunds are smaller or that they owe the I.R.S., even as their tax burdens have ...
HDFC Bank PPF investment: PPF rate 2019, income tax benefits, eligibility, deposit, withdrawal  Times NowHDFC Bank, India's largest private sector bank by asset size, offers the facility of Public Provident Fund (PPF) account under which an individual could save ...
Smaller Income Tax Refunds Bring Anger, Confusion Over Trump Tax Overhaul  NPRTax refunds so far have been smaller than last year's. Some taxpayers kept a bigger share of their income, but for others it reflects an overhaul that rewarded ...
How reachable is zero-tax income level of Rs 5 lakh using deductions, exemptions?  Economic TimesAnjali Behl has not been able to hide her excitement since the Budget was announced on 1 February. “My net income after all deductions will be below Rs 5 ...
Most Americans Support Increasing Taxes on the Wealthy: Poll  FortuneSupport for raising taxes is widespread, according to a new poll, which found that 76% of registered voters want the wealthiest Americans to pay more.
Cabinet approves abolition of Ombudsman for direct, indirect taxes  Economic TimesThe approval comes against the backdrop of people preferring online grievance redressal mechanism.
How your employer can help you reach zero-tax Rs 5 lakh income  Economic TimesAs a salaried taxpayer, you are eligible for various tax benefits that can bring down your taxable income. Here is a look at six such benefits.
For Democrats Aiming Taxes at the Superrich, ‘the Moment Belongs to the Bold’  The New York TimesThe only thing more startling than the flurry of tax proposals Democrats have unveiled in recent weeks is the full-throttle response they've gotten from the public.
Your employer can help you reach zero-tax income level of Rs 5 lakh: Here's how  Economic TimesHere are six benefits that can help the salaried bring down the taxable component of income from the employer.
Warren Proposes Universal Child Care Plan Funded by Wealth Tax  BloombergQuint(Bloomberg) -- Democratic presidential candidate Elizabeth Warren will unveil a universal child care plan Tuesday aimed at limiting American families' ...
Taxes 2019: When to file and what big changes to expect  USA TODAYTax filers need to realize, though, that it won't be business as usual when it comes to filing their 2018 tax returns.
Tax reforms, not coercion, will boost revenues  LivemintFirst four years of UPA-I saw faster growth in direct tax-to-GDP ratio than the first four years of the Modi regime, despite the absence of comparable aggressive ...
UK's richest man moves to Monaco to 'save £4bn in tax'  The GuardianBrexiter Sir Jim Ratcliffe's company Ineos is working with PricewaterhouseCoopers to reduce bill.
Richest in U.S. Have a Few Tricks to Avoid Democrats' Tax Plans  BloombergIf Democrats want the wealthy to pay more into the U.S. Treasury, they'll need to contend with one fact: the rich are very good at dodging taxes.
Wealth tax calculator: Try your hand at taxing the super rich  Vox.comSen. Elizabeth Warren (D-MA) recently proposed a wealth tax on the very rich as a way to curb wealth inequality. It's a simple 2 percent tax on fortunes over $50 ...
Many Rhode Islanders frustrated over smaller tax returns  Turn to 10Tax season is in full swing, but many people are saying their returns aren't as hefty as in years past. Accountants said the new tax law is causing some confusion ...
Tax time: What's changed in Canada for 2019  CTV NewsIf you own an Airbnb rental, have a *service* animal or attend a post-secondary institution, then you may be affected by changes to Canada's tax code.
Did you believe these myths on tax deductions?  Economic TimesSchemes like health insurance, term plans, ULIPs allows tax payers to claim deductions.

Corporations Failing To Claim AMT Exemption Overpay Taxes By $11,000

Does your incorporated business pay alternative minimum tax ["AMT]? If... Read More

Hurricane Katrina ? How To Use Your Business Loss To Get A Refund on 2004 Taxes

With the massive losses caused by Katrina, the economy of... Read More

Business Tax Deductions

As we enter mid-March, taxpayers begin to become very interested... Read More

Send Your Kids To Summer Camp and Write It Off

If you paid someone to care for a child so... Read More

1031 Exchange Rules and Requirements

Following is a reproduction of the IRS's rules and requirements... Read More

Correspondence From The IRS ? Yikes!

It's a moment every person dreads. You pick up the... Read More

Car Donation: An Easy Way to Support Your Favorite Charity and Get a Tax Deduction

Most people look forward to getting their tax return, but... Read More

SFR Substitute for Returns: IRS Action on Non-Filers

In the latest Star Wars episode, the evil empire executes... Read More

Tax Records - What You Should Keep And For How Long

Many taxpayers are confused about how long they should keep... Read More

Fiscal Deity: Tax Consultant

Strategic planning throughout the year results in a minimal tax... Read More

Know A Tax Cheat? Get Paid To Tell The IRS

According to the IRS, taxpayers underpay their taxes by some... Read More

Deducting Points On Home Refinances

Deduction of Refinance PointsAny points that you pay in the... Read More

Tax Strategy - Let Washington Pay for Your Corvette, Porsche, or Air Plane

Deducting Your Auto ExpensesAuto deductions are a very complex topic.... Read More

Save Money on Taxes - Double Your Income Now With Tax Saving Tips on Deductions

Adding Your First Additional Stream of IncomeMost new wealth builders... Read More

Section 179 ? Tax Relief From Depreciation Rules

"Depreciation." For business owners, this word is the one most... Read More

Tax Trap #3 -- IRS Penalties, Interest and Love Letters

As a small business owner or self-employed person, one of... Read More

Estate Taxes - It Pays to Plan Ahead

Estate taxes. It's not enough to simply know they exist,... Read More

Home Based Business Tax Deductions

Running a home based business reaps many wonderful tax deductions... Read More

Tax Reduction Tips

In the rush to get tax returns prepared and filed... Read More

Tax Audits: What Signs Make You More Likely to be Audited by the IRS?

It's a major fear for most Americans: A notice from... Read More

Your IRS Tax Appeal Rights

Are you in the middle of a disagreement with the... Read More

Donating Cars To Charity - New Tax Rules

On June 3, 2005, the IRS released guidance on charitable... Read More

Tax Tips for Home-Based Business Owners

As tax time approaches, many home-based business owners begin completing... Read More

Electronic Commerce Taxation and Pakistan

Assume a buyer in Pakistan downloads software from the Internet... Read More

Tips and Simple Guidelines on How to Calculate Payroll Taxes

Managing a business small, medium or big requires you to... Read More