How Likely Are You To Be Audited?
Statistics for Individuals
Unfortunately, the IRS increased its rate of auditing individuals in 2003 when compared to 2002. The increase was approximately 14%, but still constituted only 6.5 audits for every 1,000 taxpayers. Put another way, the risk of being audited on your personal return is less than 1 in 100.
In regard to the above numbers, it is important to note that the IRS pursued a large number of "correspondence audits" instead of face-to-face meetings. As the name suggests, these audits consists of correspondence being sent from the IRS to a taxpayer regarding a contested issue. The taxpayer can respond to the audit or pay the accessed amount depending upon the request of the IRS.
Favorable Audit News For Businesses
The audit rate for businesses is much lower than those for individuals. In 2002, the IRS audited roughly 2.2 out of every 1,000 businesses. In 2003, this rate dropped slightly to 2.1 out of every 1,000 businesses.
The IRS has attributed the decline in business audits to the "explosive growth" in tax shelters, which requires the Agency to pursue more expensive and time consuming audits due to the complexities involved in the plans. The Agency reported pursuing more than 2,200 such shelters in 2003, which the audits taking an average of 7 1/2 months longer than normal corporate audits.
Audit Risk
Whether you are a business or individual taxpayer, your risk of being audited is very low. The nominal risk, however, is not a license to pursue frivolous deductible claims on your returns. As long as you stick to valid deductions, you should be able to sleep without much concern.
Richard Chapo is CEO of http://www.businesstaxrecovery.com - Obtaining tax refunds for small businesses by finding overlooked tax deductions and credits through a free tax return review.
Warning: include(inc/ads-body.inc) [function.include]: failed to open stream: No such file or directory in /home/accounta/public_html/34943_business_personal_taxes.php on line 59
Warning: include(inc/ads-body.inc) [function.include]: failed to open stream: No such file or directory in /home/accounta/public_html/34943_business_personal_taxes.php on line 59
Warning: include() [function.include]: Failed opening 'inc/ads-body.inc' for inclusion (include_path='.:/usr/lib/php:/usr/local/lib/php') in /home/accounta/public_html/34943_business_personal_taxes.php on line 59
MORE RESOURCES:
 Globe and Mail | Tax staff to be paid $25M in severance, rehired National Post An agreement signed by the Liberals and the Canada Revenue Agency will see the provincial tax workers become employees of the federal government, ... Ont. tax collectors looking at $45000 severance but won't lose jobs |
NB increases property tax rebate CBC.ca The New Brunswick government is going to offer more money to more low-income people who are hit hard by property tax increases, says the finance minister. ... Province to tackle tax hikes New Brunswick government helping low-income earners with rising property taxes New property tax formula coming: Minister |
 Globe and Mail | 10% soda pop tax, 7% fewer calories Globe and Mail Based on the US study, an 18-per-cent tax on pop would result in a decline of 56 calories per person per day. Published on Friday, Mar. ... |
 Washington Post | Friday News Roundup: Week of March 8-12 New America Foundation (blog) Legislators are less eager to increase taxes, especially in an election year, and fear that increased corporate taxes would discourage businesses from ... In Ill., choice is higher taxes or education cuts Quinn Defends Plan to Fund Schools with Tax Hike Green Party's Whitney calls for income tax hike, legalized pot |
 NewsOXY | Free printable federal income tax form 1040 for filing 2009 income tax returns ... Healthy Financial Habits Almost one month from today, millions of Americans will be scrambling to file their 2009 federal income taxes. If you need free printable federal income tax ... Tax breaks can help when you lose your job Tax Tip: 4 places to find free tax help Record number of tax filers paid no federal income taxes in 2008 |
 CBC.ca | WALT COBB: Taxes a necessary evil Williams Lake Tribune NDP energy critic John Horgan has said that the tax will be eliminated, “but we have to find revenue to offset that from other taxes.” None of us like taxes ... Doubts remain after HST report The BC government sneaks another tax hike in through the back door |
Gov. Lingle signs state law reducing large business tax increase for Hawaii ... CanadianBusiness.com HONOLULU (AP) - Businesses in Hawaii are getting immediate relief from the nation's largest increase in unemployment taxes after Gov. ... Lingle signs bill lowering unemployment tax increase |
 CBC.ca | 'Soda tax' movement gains steam Vancouver Sun New York state is the latest American jurisdiction eyeing a "soda tax" to curb the obesity ... Editorial: Nickels and dimes of new taxes just add to the toll Soda Tax: Is New York Soaking the Poor? Study: Taxing junk food could alleviate obesity |
 TopNews United States | Tax fallout Pueblo Chieftain DEMOCRATS DIDN'T know there would be fallout from their dozen tax increase bills this year? Gov. Bill Ritter and his fellow Democrats who control the ... The Tax War Goes Online Colorado's feud with Amazon puts focus on national online tax efforts Opposing rising taxes |
Vodafone Sends Final Submission To India Tax Body Wall Street Journal "Vodafone is confident that no tax is payable on this transaction. All of the taxation and legal advice we have received remains consistent with this view," ... |
Google News
Tax Help Secret: Avoiding the Entreprenuers Curse
Your days as an entrepreneur and businessperson are consumed with one primary activity; making money. Whether you think in terms of growing your business, getting the word out there, or some fancy new marketing technique, your days and weeks and months in business are focused on that one group of activities.
Early Distributions From Retirement Plans
An early distribution from an Individual Retirement Arrangement (IRA) or a qualified retirement plan need not be a "taxing" experience. Fortunately, there are exceptions to early distributions.
Taxing Overseas Firms for SOX Compliance
The Sarbanes-Oxley Act, also called the Public Company Accounting Reform and Investor Protection Act of 2002 was signed into law on July 30, 2002 by President Bush. In the aftermath of Enron, Arthur Andersen, Global Crossing, and WorldCom, SOX promises greater corporate accountability and transparency.
What You Need To Know About Taxes If You're Getting Married
It may not be high on the list of wedding planning activities, but there are a few simple steps that can help keep tax issues from interrupting your newly wedded bliss. If you recently married, check out your new tax situation.
Truly Bizarre Taxes: The Tax on Illegal Drugs
One can never underestimate the enthusiasm that politicians have for trying to hunt up tax revenues. The creativity of some politicians can lead to bizarre taxes and unfortunate results.
Insider Guides to IRS Audits!
Ever wish that, as a business owner, you knew exactly what would raise "red flags" at the IRS? Or how to make an IRS audit go as smoothly and painlessly as possible?If you're in the right type of business, you can get that information, directly from the IRS!Traditionally, IRS examiners have been responsible for auditing many types of businesses. An examiner might audit a grocery store one week and a construction company the next.
Corporations Failing To Claim AMT Exemption Overpay Taxes By $11,000
Does your incorporated business pay alternative minimum tax ["AMT]? If so, there is a 93% chance you have been overpaying your taxes by an average of $11,000 a year according to the Treasury Inspector General.The Office of the Treasury Inspector General for Tax Administration was created in 1999 to oversee the IRS.
Tax Tips - Which Tax Form Is Right For Me?
IRS Tax forms can be confusing.Am I a 1099 or a W-2.
2005 Ford Escape Hybrid Certified For Clean-Fuel Deduction
If you are environmentally conscious and purchase a 2005 Ford Escape Hybrid vehicle that combines a gasoline-powered engine with alternative power methods, you are in line for a nice tax deduction.Ostensibly, the government uses clean power tax deductions as a method to promote the use of vehicles that are less harmful to the environment.
Deducting Points On Home Refinances
Deduction of Refinance PointsAny points that you pay in the refinancing of your residence are tax deductible over the length of the loan in question. The deduction is allowable only if the residence is your primary home and the new mortgage replaces a previous one and/or is used to improve the residence.
Surprising Truths About Tax Preparers
Choosing the right tax preparer for your business is a decision best not left until April. A former tax preparer and small business mastermind offers insights into the secret world of tax preparers.
Tax Secrets - How Drew Miles Helped Me
How about a Tax Tip?As we all know Taxes are a necessary evil. While none of us like paying taxes there are many strategists out there that can make your life a lot easier when that dreaded day arrives.
Identity Theft - Impacting Your Taxes?
If your identity is stolen, your finances can quickly become a nightmare. A less obvious problem is the effect identity theft can have on your taxes.
Complaince of Tax Return in Electronic Commerce Taxation
Emerging Legal issues of Tax compliance of e-business Self-assessment system relies on taxpayers voluntarily meeting their tax obligations by tax payee. This concept is recognised in all tax statutes, which sets out taxpayers' primary obligations to fill tax return on self-assessment, and clearly spells out that taxpayers are required to determine the amount of tax payable correctly and to pay it on time.
10 Tax Tips to Reduce Costs and Increase Income
No one likes paying tax. Everyone understands that tax is a necessary evil and that without it our government would not be able to afford our roads, health services, education, welfare system etc.
Euro Tax Haven Threat
Media reporting of a new EU savings tax directive has left many people wondering whether European tax havens could soon become obselete.The July directive requires banks throughout Europe, including low and no tax areas such as Gibraltar, Monaco, Malta and Andorra, to disclose bank account owner information to their home country's tax authority.
Access to E-records by Taxing Authorities: A Case for Pakistan (Part I)
Background issues of access to recordsTo assess the records at hosted remote retained out of the jurisdiction of Pakistan root many legal issues which are needed to be addressed. Hereinafter there is description of the emerging legal issue of access to e-records.
Tax Deduction for Alimony Payments? - Yes!
Over 50% of marriages end in divorce in the United States. Many divorce decrees include provisions for the payment of alimony.
IRS Lock-In Letters - What's An Employer To Do?
Employers often ask employees to designate the amount of tax withholdings for paychecks. Occasionally, employees will fail to withhold a sufficient amount in the eyes of the IRS.
Small Business Tax Deduction - Write-Off Bad Debts
Practically every small business has receivables that it cannot obtain from clients. If your small business doesn't have any such receivables, consider yourself lucky.