IRS Audit Lottery: Odds are Better than Winning the Lottery

Because of cuts to the IRS's budget fewer and fewer audits are being conducted by the IRS.

The audit rate for last year was a little under 1% for individual income tax payers but this 1% includes correspondence exams as well as in-person audits by revenue agents.

Individuals with over $1 million had a 5% chance of an encounter with a revenue agent but the rate for those with incomes between $200,000 and $1 million was only 1.11%.

Those of us with incomes below $200,000 had slightly less than a one quarter of 1% (.25%) chance of getting audited.

These are better odds than winning the lottery, but not nearly as much fun.

Chances of being audited in 2014 are even lower than last year. Audit rates for corporations are expected to decline this year also.

- Mark S Gleason CPA
  www.lakes-cpa.com