CNBC has this article about your chances of facing an IRS audit. If you earn $200,000 or more per year, your audit chances are 1 in 25 (4%). For those earning $1 million plus each year, your audit chances are 1 in 8 (12.5%). If your annual income is under $200,000, your audit chances are just 1 in 100 (1%). One suspects that these audit odds are primarily politically motivated, rather than actually driven by tax evasion or income under-reporting data or similar metrics. In any case, as long as you keep careful financial and tax records and retain your records for several years, audits shouldn’t be a big concern, just a time consuming issue to deal with. If you find yourself in an audit situation or needing tax and/or estate planning advice, give me a call or send me an email to setup a convenient appointment.
(c) 2012, Stephen M. Johnson, Esq.