• Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Pridgeon & Zoss, PLLC

Just another WordPress site

  • Home
  • Firm Overview
    • Review Us
  • Meet Our Attorneys
  • Tax Law Services
    • CP504 Notice in MN
  • Professional Referrals
  • Our Required Retainer Deposit & Fees
  • Blog
  • Contact Us
Home / Audits / Audits are more likely with a higher income
  • Home
  • Firm Overview
    • Review Us
  • Meet Our Attorneys
  • Tax Law Services
    • CP504 Notice in MN
  • Professional Referrals
  • Our Required Retainer Deposit & Fees
  • Blog
  • Contact Us
Call
Contact
Blog

Audits are more likely with a higher income

Audits are not as common as many people think. That’s especially true if you make less than $200,000 per year.

In 2015, for example, the IRS got 147 million individual returns. They only audited about 0.84 percent of them. The year before, the rate was 0.86 percent, so there was a small drop even into 2015. That stuck with the trend, as the number was the smallest it had been in about 10 years.

So, how does income factor in? For those making under $200,000 each year, the odds of an audit stood at a mere 0.76 percent. In 2014, that number was 0.78 percent for the same group, and it was 0.93 percent 10 years ago. It’s clear that the IRS is focusing more and more often on the upper end of the wage spectrum.

For example, those who earned $1 million or more last year saw an audit rate of almost 10 percent, more than 10 times what was noted for those under $200,000.

The IRS isn’t trying to do this to be kind, though. Budget cuts were a big part of it. It takes a lot of manpower to carry out so many audits, so reductions meant the number that were done also had to drop. Going after those with a higher level of income means that there is more to gain when mistakes are found. The IRS may spend more than it would gain to audit someone who only made minimum wage last year.

If you are in this higher income bracket, the IRS could be targeting you more than others with lower earnings. When they do, be sure you know what legal steps you need to take. An audit can be stressful and complicated, but being prepared in advance will help you move forward.

Source: Bankrate, “IRS audit red flags that will tempt the auditors,” Kay Bell, accessed Dec. 01, 2016

On Behalf of Pridgeon & Zoss, PLLC Dec 01 2016 Audits

Primary Sidebar

Do Not Delay Responding to a Tax Notice

Name(Required)

Practice Areas

Tax Disputes

  • Tax Litigation
  • Audits
  • Tax Appeals
    • Appealing a Levy Action

Business & Payroll Taxes

  • Trust Fund Assessments
  • Complying with Sales and Use Tax Laws

Self-Employed

  • No Taxes Withheld

Outstanding Balances

  • IRS Collections and Currently Not Collectible Status
  • Settlement Options
    • Offers in Compromise
    • Installment Agreements

Latest Blogs

The Secret to Successful Self-Employment

October 19, 2022

Things You Should Expect Being Self-Employed in Minnesota

October 13, 2022

The Importance of Source Documents

July 7, 2022

What Is a Notice of Deficiency?

June 9, 2022

What is the IRS dispute resolution process for businesses?

April 9, 2021

Footer

Edina Tax Law Office

7301 Ohms Lane, Suite 420
Edina, MN 55439

Telephone: 952-835-8320

Fax: 952-835-0201

St. Anthony Tax Law Office:

2812 Anthony Lane S, Suite 200
St. Anthony, Minnesota 55418

Telephone: 612-455-8948

Pridgeon & Zoss, PLLC provides legal counsel for clients in Minnesota and Western Wisconsin

© 2023 Pridgeon & Zoss, PLLC. All Rights Reserved.

Disclaimer | Site Map | Privacy Policy