The Internal Revenue service is reporting that audits during fiscal 2007 were up compared to 2006. 59,516 businesses were audited in 2007, about 0.66% of all businesses.
Businesses with assets between $10 million and $50 million are the focus of enforcement efforts, so companies that fall in this range are more likely to be audited. The IRS is reporting that companies in this range had a 1 in 6 chance of being audited.
And individuals are seeing more audits too, with a 7% increase in audit rates from 2006.If you’re earning a million dollars a year or more, you’ve got a 1 in 11 chance of being audited. If your income is $100,000 or less, you’ve only got a 1 in 100 chance of being audited.
The IRS says its enforcement budget hasn’t been increasing, so they’re going for better targets. That’s why earning more or being a larger business makes you a more desirable target… there’s more money to potentially be collected from you or the company.
Can you do anything about this? No. You just need to be aware of the possibility of the audits, and know that if you’re a higher earner, you’re much more likely to get hit with an audit. If you do get an audit notice, check out these tips for getting through the trauma successfully on my corporate site.