IRS audits on the rise for high income individuals and corporations
Recently politicians, protestors, and the media have been debating whether or not high-income individuals and corporations are paying their so-called “fair share” of taxes.Apparently this is also an IRS concern. Steven Miller, deputy IRS commissioner for services and enforcement wants to, “assure that those at the lower end of the spectrum know that those at the higher end of the spectrum are subject to the same rules and enforcement as everyone else.”
IRS spokesperson, Michelle Eldridge, quoted in a USA Today article, softens their position, We base our audit decisions on tax issues, nothing else. We don’t play politics here.”
Even so, statistics provided by the IRS indicate that 12% of individuals earning over $1,000,000 and 28% of corporations with assets of at least $250 million were audited last year. On the other hand, those with earnings below those thresholds are less likely to be audited.
The audit rate of those earning less than $200,000 was around 1% — the same percentage for corporations with assets under $10 million. No matter your income, the big picture is that the percentage of individual returns audited is increasing and, in fact, has doubled since 2001.
There’s no guaranteed way to avoid an audit, but, as always, we are here to keep the percentages on your side should you receive an unwelcome communication from the IRS.