The IRS audits are coming, the IRS audits are coming.
The IRS is on a mission to increase the number of returns that are going to be audited. The IRS is concerned about the estimated $345 billion “Tax Gap,” the difference between what taxpayers voluntarily pay and what they really owe. The number of individual audits has increased by 21% since 2004 and small corporation audits were up 145% from 2004 to 2005. Audits of high-income people, over $100,000, have doubled since 2001. Those staggering increases signal the IRS is coming. Are you ready?
According to the latest IRS “Data Book” for the 2006 fiscal year, IRS audits have increased for virtually every taxpayer category. What’s more, the IRS vows to keep the pressure up as its focuses on a perceived $300 billion revenue “tax gap.”
Here are the key facts:
• About 1.3 million individual income tax returns were audited; 41,648 employment tax returns and 28,799 corporate returns.
• Audit rates for individuals with an AGI between $50,000 and $100,000 increased from .57 percent in 2005 to .60 percent for 2006.
• Audit rates for self-employed business filers with an AGI above $100,000 jumped from 3.65 percent for 2005 to 3.90 percent for 2006. (For 2004, this figure was only 1.86 percent).
• Exams of S corporation returns increased from .30 percent for 2005 to .40 percent for 2006. But audit rates of non-S corporations remained at 1.60 percent.
• Approximately 30 percent of all audits were conducted by IRS personnel. The remaining 70 percent were correspondence audits.
The message is clear: With examinations on the rise, it is becoming even more important that the deductions and credits you claim stand up to any IRS challenges. We would be glad to provide whatever assistance is necessary. Premier Accounting & Tax, Inc. Get the “Premier” difference…I am a PROACTIVE tax accountant who can help you!
• Over 25 years experience
• Individual and business returns, corporations, partnerships & LLCs
• IRS audit protection service
• Enrolled to represent taxpayers before the IRS FREE 1-Hour Consultation & Review of Prior Returns
If I find missing deductions from the past 3 years, I can help you get your money back!
Paul V. Thompson, EA, ABA, ATA, ECS
Premier Accounting & Tax, Inc.
Ph. 703-535-1590
premiertax@cox.net
