You often hear of people being audited, but how likely are you to actually receive an audit notice from the Internal Revenue Service (IRS)? According to a recent report, your chances are around one in 160.
After the recent 35-day government shutdown, the IRS is facing budget and audit staff cuts. As a result, IRS audits are at an “all-time low.” However, there are still certain groups of individuals who remain at a higher risk of an audit this year.
Data suggests international taxpayers are at the highest risk of an IRS audit. Around one in 20 international taxpayers will receive an audit notice from the IRS, as opposed to farmers who face a 1 in 225 chance of an audit. Overall, taxpayers filing individual returns typically face the highest chance of an IRS audit on average, as opposed to partnerships or corporations. While the IRS tends to audit the same percentage of groups each year, they will still be likely to audit any “unusual or questionable” items on a tax return.
The IRS conducts audits to ensure that taxpayers are filing their returns properly. While an audit can seem like a terrifying ordeal, they are simply a way for the government to verify that the information you reported on your taxes is correct. According to the IRS, the selection of audits is based on random selection. Therefore, there is not always a need to worry that you are in trouble with the law.
Receiving an audit notice from the IRS can be extremely stressful. It can be beneficial to consult with an experienced tax attorney to discuss your options and ensure that your taxes are filed properly.