The IRS is focusing much of its resources on wealthy taxpayers. Our firm is seeing an increased number of audits focused on high earning individuals and businesses. Among the most likely audit risks are Schedule C businesses and individuals claiming large amounts of itmized deductions. Individuals or companies that are selected for audit should seek the consultation of a Maryland Tax Attorney.
New data from the IRS shows that tax filers with taxable incomes of $1 million or more were audited nearly 12 times more often than the population as a whole. About one in eight of them were examined in the fiscal year 2012, for a total of 41,000.
Those examinations have proven highly lucrative. The IRS found $4.8 billion in additional taxes from the audits. The average amount per return was $117,000.
Of course, not all million-plus earners are tax dodgers. But only about a quarter of those examined last year by the agency had no change in taxes paid.
The audits are part of a new campaign by the IRS to take aim at wealthy tax avoiders. The agency’s new Global High Wealth Industry Group, founded in 2009, is staffed by professionals trained in the complex returns often filed by the wealthy. Many of top earners are business owners report their company income through their personal returns, making them far more complicated than most personal returns.