IRS audits jump by 11 percent with a view to targeting the most wealthiest taxpayers!!
The Internal Revenue Service "increased the number of returns it audited by nearly 11 percent this year". It appear that the IRS examined more than 1.58 million individual returns in the budget year that ended in September, up from 1.43 million the year before.
"We saw individual audits increase, reaching the highest rate in the past decade," said Steve Miller, IRS deputy commissioner for services and enforcement. "The bottom line shows enforcement revenue topped $57 billion, up almost 18 percent from last year."
Overall, a little more than 1 percent of individual returns were audited, either by mail or in person. The IRS audited more than 8 percent of returns with incomes above $1 million.
"Taxpayers filed nearly 143 million returns, including those from individuals and married couples. Nearly 389,000 taxpayers reported incomes of $1 million or above. Corporate audits dropped slightly, by less than 1 percent. But there was a 7 percent increase in the number of audits of firms with $10 million or more in assets."
The bottom line is that both the Tax Preparers or Tax Professionals should be aware of taking aggressive deductions without corresponding supporting documents, because in the event of an audit, substantial penalties can be assessed to both the preparer and the taxpayer!
So beware of taking deductions that are dubious to say the least!