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    Audit Practices

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    Identify a profile for a taxpayer who is more likely than the national average to be audited by the IRS. What factors cause certain taxpayers to be audited more frequently? What actions should taxpayers and the IRS take to ensure fairness and equality? Explain.

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    A tax payer who will get audited typically claims additional deductions that the tax payer is allowed to claim. Also, the tax payer may add more money to their charitable donations. In 2010, there was approximately 1.1% (1,500,000) of the tax filers that were audited. The audit rate increases to 12.5% for earners making $1,000,000 or more (an increase of 100% as compared to 2009 tax year).

    The tax audit is set off by the following items: charitable contributions, employee business expenses and vehicle expenses. Another set off is no reported business income but high deductions for business and rental schedules. Also, tax audits are set off by a tax filer's tax return not ...

    Solution Summary

    The expert examines audit practices for taxpayers.