What Are Your Odds of Getting Your Taxes Audited by IRS?

What Are Your Odds of Getting Your Taxes Audited by IRS?

Will you get audited by the IRS? Here are your odds, courtesy of the IRS and found in the Journal of Accountancy, Tax Matters, April 2012, page 59.

If you filed your tax return as an individual in 2011, the odds of getting audited depend on your reported income level and vary from 1% to 12.5%:

Income under $200K – 1.02%
Income $200K and higher – 3.93%
Income $1 million and higher – 12.48%

If you filed as a business, here are you chances of getting audited:

Total – 0.63%
Sub S – 0.42%
Partnership – 0.40%
Nonprofit – 1.36%
Assets under $10 million – 1.02%
Assets $10 – $50 million – 13.3%
Assets $50 – $100 million – 18.9%
Assets $100 – $250 million – 16.6%
Assets $250 and over – 27.6%

If the IRS recommends prosecution, the conviction rate is 92.7% and the average sentence is 25 months.

Some other dandy facts:

Number of IRS enforcement officers and agents: 22,184.
Total collected from enforcement activities: $55.2 billion
Estimated potential that could be collected (in other words, how much we are cheating): $450 billion
Of this potential: 81% is from individuals underreporting, underpaying, or nonfiling.
40% is individuals underreporting their business income or their self-employment taxes.
25% is people underreporting their nonbusiness income, adjustments, deductions, exemptions, or credits.
15% is corporations underreporting

See the sources: http://www.irs.gov/pub/newsroom/fy_2011_enforcement_results_table.pdf
Source: Tax Matters Journal of Accountancy April 2012 page 59

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