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The Internal Revenue Service (IRS) is on the prowl. With the economy in the dumps, they have been ordered to increase tax revenues. How do we know this? Because the infamous federal agency has suddenly and dramatically increased the number of tax returns it examines each year. Financial audits jumped from 1.43 million to 1.58 in 2010, an increase of nearly 11 percent. According to their own representatives, enforcement revenue topped $57 billion last year, up nearly 18 percent! These are the agents who are ostensibly going after tax cheats, but the truth is far from that. With a record-high enforcement budget of 5.5 billion dollars, it is no wonder that IRS audits reached their highest level of the past decade in 2010. The Good, the Bad and the Ugly The IRS only audits about 1 percent of the individual tax returns that it receives. Nearly eighty percent of them are correspondence audits and can be handled through the mail. In other words, they are relatively minor problems that are often the result of math errors or a dearth of documentation. If you can provide additional documentation to support your deductions, you may not incur a tax debt. But that is quite rare. When the IRS gets you on the hook, it is difficult to squirm free. The overwhelming majority of IRS audits result in tax debt. Roughly 85 percent of taxpayers who are audited end up owning the government back taxes, plus interest! An estimated twenty million Americans owe back taxes, and most of them were audited! The IRS has also embraced the practice of targeted auditing. In 2010, they went after wealthy taxpayers with a vengeance. Americans who earned more than 1 million dollars a year were audited at a rate of more than eight times the national average, a fifteen percent increase from the previous year. Because wealthy individuals pay most of the taxes, they are also paying most of the money for IRS audits. Call a Tax Advisor Today! Whether it arrives in the mail or in the form of an IRS agent on your doorstep, an audit is serious business. Contrary to everything we know about the justice system, you are considered to be guilty until proven innocent during an IRS audit. That’s right! The burden of proof is on you! That is why most Americans who receive an audit contact an experienced tax advisor as soon as possible. What can they do? First and most importantly, they will help you understand why you were audited. If it was a mistake on the part of the agency, a tax advisor may be able to settle it in short order. More often than not, however, the error was yours and you may end up owning some form of back taxes. The right tax advisor will act as your representative in all dealing the IRS and will attempt to secure a favorable deal that includes manageable monthly payments. For more information about irs audit, irs help, or tax problems help please visit Txmstr.com.
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