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.

MORE RESOURCES:

Obama#39;s 95% Illusion - Wall Street Journal

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The Savings Game: Taxes inevitable when drawing from an annuity - Salt Lake Tribune

McCain weighs proposal to cut taxes on investments - KSBY

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North Dakota county officials study uranium taxes - Jamestown Sun

• Time is right to raise taxes on gasoline, says author of ... - MLive.com

Jesuits call for higher taxes on better-off - Irish Times

Property owners could save on taxes with Amendment 4 - TCPalm

table border=0 width= valign=top cellpadding=2 cellspacing=7trtd valign=top class=jfont style=font-size:85%;font-family:arial,sans-serifbrdiv style=padding-top:0.8em;img alt= height=1 width=1/divdiv class=lha href=http://news.google.com/news/url?sa=Tct=us/6-0fd=Rurl=http://www.tcpalm.com/news/2008/oct/13/property-owners-could-save-taxes-amendment-4/cid=1256364902ei=LUzzSM_ZGKSeygTJuIySAQusg=AFQjCNFNHBRM5Gr7MDEevvwP0WM0pRCR4QProperty owners could save on btaxes/b with Amendment 4/abrfont size=-1font color=#6f6f6fTCPalm,nbsp;FLnbsp;-/font nobr9 hours ago/nobr/fontbrfont size=-1By Monique Mattiace Amendment 4, Property bTax/b Exemption for Conservation Land, will be before Florida voters on the Nov. 4 ballot. b.../b/fontbrfont size=-1a href=http://news.google.com/news/url?sa=Tct=us/6-1fd=Rurl=http://www.heraldtribune.com/article/20081012/OPINION/810120332/-1/FRONTPAGE%3FTitle%3DAmendments_3__4_and_6__Yescid=1256364902ei=LUzzSM_ZGKSeygTJuIySAQusg=AFQjCNFxBRlIunR97YAK0QhbGmqzFT59JgAmendments 3, 4 and 6: Yes/a font size=-1 color=#6f6f6fnobrSarasota Herald-Tribune/nobr/font/fontbrfont size=-1a href=http://news.google.com/news/url?sa=Tct=us/6-2fd=Rurl=http://www.tallahassee.com/article/20081012/NEWS01/810120336cid=1256364902ei=LUzzSM_ZGKSeygTJuIySAQusg=AFQjCNEViML4OmQvnyKT5op-sTRENgRWmgFlorida voters to decide on property-btax/b break for conservation land/a font size=-1 color=#6f6f6fnobrTallahassee.com/nobr/font/fontbrfont size=-1a href=http://news.google.com/news/url?sa=Tct=us/6-3fd=Rurl=http://www.tampabay.com/SearchForwardServlet.do%3FarticleId%3D846221cid=1256364902ei=LUzzSM_ZGKSeygTJuIySAQusg=AFQjCNFgiBLqCQKBBHbFpbIWFth8fjOoYwOn the amendments/a font size=-1 color=#6f6f6fnobrTampabay.com/nobr/font/fontbrfont class=p size=-1a class=p href=http://news.google.com/news?sourceid=navclientie=ISO-8859-1rls=GGLG,GGLG:2005-22,GGLG:enncl=1256364902hl=ennobrall 10 news articles/nobr/a/font/div/font/td/tr/table

Italian council offers Mafia whistleblowers exemption from taxes - Telegraph.co.uk

Something stable in the economy: Oregon property taxes - The Oregonian - OregonLive.com

Incumbent Rabbitt, challenger Sommer differ on taxes - Times Herald-Record

Taxes - Google News

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