From our CPA office in St. Petersburg, FL – One in eight people earning at least $1 million annually was audited by the Internal Revenue Service last year, a much higher rate than for individuals earning less than $200,000 where just 1 in 100 had their income tax returns examined.
Additionally, the 12 percent of millionaire earners audited in 2011 was significantly higher than the 8 percent audited in 2010. The IRS contends that the increasing percentage was part of an effort to demonstrate the fair application of the tax laws. The IRS wants to assure lower income taxpayers that those at the upper end are subject to the same rules and enforcement practices. Between 2004 and 2009, the percentage of millionaire earners audited ranged between 5 and 7 percent.
IRS audit data is divided into three income categories: below $200,000, $200,000 and above, and $1 million and higher. About 1 in 25 people earning above $200,000 was audited in 2011. A greater proportion of large corporation were audited compared to smaller ones. Many times, taxpayers that are selected for audit end up paying additional taxes.
If you received an audit notice from the IRS, contact us for assistance. As tax professionals, McAtee & Associates can help taxpayers through the difficult audit process in a timely manner. Contact us for assistance in all of your financial and tax matters.
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