7 Red Flags For Government Audit
I'm busy finishing my taxes and looking for anything that will help me. I read that most people don't turn in their taxes till the last few days, so if you are like me and still working on them. Here's some tips.
Taxpayers overall face a low audit risk: The IRS audited 1.1% of all individual tax returns filed in 2010, or 1.6 million returns of 141 million filed.
The vast majority of those audits — 1.2 million — were done by mail. Just 392,000 involved an in-person meeting with the IRS. That’s not necessarily good news.
Taxpayers often are confused by IRS correspondence and with such audits don’t have the benefit of working with one single agent, the National Taxpayer Advocate says.
But the risk of an audit skyrockets for some. Fully 12.5% of taxpayers whose income topped $1 million faced an audit. And self-employed people who filed a Schedule C with gross receipts of $100,000 or more faced an audit rate of about 4% — four times higher than average taxpayers.