IRS Reports Declining Audit Rates For Individuals
Posted by: Brookside Admin
While the IRS has plenty of time to continue examining submitted tax returns from 2015, they've gone ahead and released data from this year's returns and revealed that the audit coverage rate stands at the lowest rate in over a decade. The audit coverage rate refers to the percentage of federal tax returns examined either in person or by mail correspondence. For the third straight year, that rate is less than1-percent of all federal returns and at 0.84-percent it's the lowest rate since 2004.
While that means that the chances that your tax return being chosen for an audit in 2015 were low, it still means that 1.2-million individuals were audited this year. That's still a lot of Americans facing the stress of an audit, even though it's about 300-thousand fewer individuals than in 2010.
While fewer IRS audits always sounds like a good thing to a typical tax payer, the decrease in audits isn't without it's downside. Fewer audits means less money collected. Specifically, in 2015 the IRS has generated just $7.32-billion in audit collections. That's down from an average of $10.5-billion per year between 2010 and 2014. And, even farther down from an average of $14.7-billion collected annually between 2005 and 2010.
The loss in annual collections is sure to bring attention from politicians. Specifically, IRS Commissioner John Koskinen has publicly voiced concerns that the lower audit figures will direclty correlate to more individuals trying to cheat the system. He's also admitted, however, that increasing audits would require additional funding and more staffing, which seems impossible after recent budget cuts.
For now, it appears likely that 2016 will continue this trend of fewer audits for individual tax payers. However, intentionally submitting false information on your tax return is still likely to result in an audit and fines.
A better way to ensure that you get the deductions and the refund you deserve is to work with the professionals at Brown Kinion CPAs. Our clients throughout Tulsa, Bixby and Broken Arrow rely on us to help them plan and file both individual and business tax returns. Contact us for help.