What are the chances or odds that the Internal Revenue Service will audit your income-tax return?

For inquiring minds that want to know what your chances for an IRS audit you can read below and find out what your chances are of an IRS tax audit.
Please note that these figures change from year to year but by very miniscule amounts.
 

Average yearly statistic

 
IRS audits 1.1% of all personal income tax returns. That is it!
 

What are your odds/chances of a IRS Tax Audit by Income

 
No adjusted gross income           3.43%
$1- $25,000                                    1.22
$25,000-$50,000                         .73%
$50,000-$75,000                         .83%
$75,000-$100,000                       .82%
$100,000-$200,000                    1.1%
$200,000-$500,000                   2.67%
$500,000-$1,000,000                5.32%
1,000,000-$5,000,000               5.38%
$5,000,000-$10,000,000          20.95%
over $10,000,000
 

Total IRS Collections for the year

 
The IRS collected $2.5 trillion in total tax dollars in 2012, broken down as follows:

• From individuals:  $2.1 trillion.

• From businesses: $285 billion.

• From other sources: $115 billion.

 
It is important to remember that IRS audits tax returns keeping in mind their budget for the current year and their available personnel to actually audit a tax return.
If you have any questions regarding IRS tax audits call us today and you’ll speak to experienced IRS tax professionals to answer all your questions.
 

Why you may have been selected for a IRS Tax Audit

The Internal Revenue Service loves large corporations, partnerships and self-employed taxpayers.
Also, IRS officials are keenly interested in taxpayers who own their own businesses, file what is known as “Schedule D,” and deal in large amounts of cash.
Another reason, a big reason, the DIF score.
To help in the selection process, the IRS assigns a score to each return based on a secret formula designed to pick those returns where “the potential is high that an examination of your return will result in a change to your income tax liability.” Its computer program is known as the Discriminant Inventory Function system, or DIF.
 

Document matching

 
Then there is “document matching.” The IRS matches what taxpayers have reported on their returns against what was reported separately to the government by employers, investment firms and other sources. If there is a mismatch, be prepared to explain the difference. If you do get audited, don’t panic. Over 1.4 million tax returns are audited by correspondence mail.
 

Tips from informants or ex- spouses

 
Some people are selected because of tips the IRS has received from would-be informants  or  an ex spouse so be careful who you make mad.

Random Sample

 
Or perhaps you were unlucky enough to have your return selected at random. From time to time IRS uses random sampling to keep a heartbeat on all tax returns filed to find new areas were taxpayers may be cheating. As a general rule IRS random samples 5000 tax returns across the United States each and every year.
If you do get audited, don’t panic. Over 1.4 million tax returns are audited by correspondence mail.
 

Cash businesses

IRS is keenly aware of all industries such as laundromats, restaurants, bars and hair salons that deal in cash. IRS has specifically targeted program to hit industries of widespread abuse. You can make sure IRS will audit their fair share of cash businesses.
 

You may be audited because of another tax on it that’s going on

 
As a  former IRS agent I can tell you that many audits take place because during an investigation of the business company or individual tax return and agent got suspicious.
They have the latitude and flexibility to pick up other tax returns as a result of their suspicion. Usually when this happens, this is very low hanging fruit and results in revenue back to the IRS.
 

Save your tax records

 
While you don’t want to turn into a hoarder, err on the side of saving tax-related records just in case your return gets picked. Should you have won the IRS audit lottery you should never go into IRS unrepresented for an IRS audit.
As a former IRS agent seeking good professional tax will in the long run save you aggravation, grief, stress and keep money in your pocket in the long run.
If you have received an IRS letter or notice that you are going to undergo an IRS tax audit is in your best interest to call former IRS agents and managers who know all of the protocols, techniques and tax defenses to best defend your tax return that is undergoing an IRS tax audit.
 

Chances/Odds of a IRS Tax Audit, Former IRS Agents Disclose

Chances/Odds of a IRS Tax Audit, Former IRS Agents will tell you