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December 17, 2011

What is the likelihood that I will be audited by the Internal Revenue Service?

As a tax attorney in Columbus, Ohio, I am often asked by clients and others, how likely am I to be audited by the Internal Revenue Service. My answer consistently is: well, as a tax attorney, I am not comfortable answering that question based on your specific tax position and your specific tax return. But, I can direct you to the Internal Revenue Service website, where they keep statistics on a yearly basis regarding examination of returns.

Clients and taxpayers, in general, are surprised as to the amount of information available on the Internal Revenue Service website regarding examination statistics. As an example, the Internal Revenue Service recently issued its statistics regarding tax returns examined in Fiscal Year 2010.

Overall there were 187,124,450 returns filed and 1,735,083 returns examined, which represents .9 percent of returns covered by examination. That is less than one percent folks. But, as always, the devil is in the details. For example, the Internal Revenue Service examined 4.7 percent of returns filed where individuals reported gross receipts between $100,000 and $200,000 and filed a schedule C. On the other hand, the Internal Revenue Service examined 98 percent of certain large corporate taxpayers. So, it all depends.

For more detail regarding the audit statistics please see Nardone Law Group's frequently asked questions How are Returns Selected for Audit and Tax and Controvery Services. Also, for the actual statistics themselves please see the below link.Download Examination Statistics (00046381)

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December 17, 2011

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