Tax blogger Kay Bell has collated a range of audit related statistics in her recent post, IRS lets rich off audit hook!
The most interesting piece of information for me was her quote from an IRS employee who provided some insight into the factors that go into an audit "red flag" (or what's called a DIF score in tax jargon). The quote comes from IRS auditor Nancy Como, who says that audit factors are "... sort of a random selection.
The IRS evaluates tax returns based on IRS formulas, and this is based on deductions, credits, exemptions with norms for taxpayers in each of the income brackets." I love it when the IRS says something is "sort of random." Bell then pulls sample data from publisher CCH to illustrate how deductions outside of certain ranges might trigger an audit, and this data seems much less random than the IRS might want us to believe.
Related information:
Preventing an IRS Audit
Avoiding Small Business Audits
Audit support in TurboTax and TaxCut
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