There is a 1-in-104 chance of being audited. Fully 70% of all audits are handled by mail, not in person with an IRS agent. Your Audit Odds May Be Higher Than the Averages!
“But don’t be lulled into a false sense of security. When it comes to tax audits, broad generalizations are almost always useless. Your true chances of being audited could be much higher than the latest statistics suggest.” www.kiplinger.com/article/taxes
Your 2013 tax return could be audit bait if:
- Your income was over $200,000. Taxpayers with incomes of $200,000 or more had an audit rate of 3.70 percent in 2012, nearly four times as high as those with lower incomes, says Joy Taylor, assistant tax editor at Kiplinger’s and author of the article “IRS Audit Red Flags: The Dirty Dozen.”
- You’re self-employed. Taxpayers who work for themselves can claim a variety of write-offs that most employees can’t — from a home office to the business use of a car — and the IRS may have questions about their legitimacy. “Self-employed people are more likely to overstate deductions and fail to report self-employment tax,” says Barbara Weltman, contributing editor of J.K. Lasser’s Your Income Tax 2014.
- Your itemized deductions were much higher than other taxpayers with similar incomes. The bigger the difference between your write-offs and the averages, the more likely your return could be flagged, though it’s impossible to say exactly how wide the gap would need to be to attract the attention of the IRS. Similarly, if your itemized deductions totaled far more than what you claimed in previous years, your return could trigger an audit, too, says John Vento, a New York-based certified public accountant and author of Financial Independence (Getting to Point X).