Tax relief for the wealthy does not have much popular support these days. And apparently the IRS feels the same. The IRS recently reported that audit rates for individual taxpayers earning over $10 million has nearly tripled since 2009. If you’re one of the .01 percent who makes that kind of money, then you have a 29.93 percent chance of being audited.
I know how some people are going to read this headline. Some people are going to think that they are safe because they earn a lot less than $10 million per year. If the IRS is focusing its efforts and manpower on examinations of the ultra wealthy, then that means audits of returns filed by the average Joe are decreasing, right?
Wrong. The overall audit rate remains constant at 1.11 percent. Maybe you like those odds. Well, before you do anything you’ll regret later, be aware that income is only one factor that the IRS looks at when determining who to audit. Furthermore, I’m not certain that these statistics include the so-called correspondence audits, which are becoming more and more common these days.