Robert J. Fedor, Esq., L.L.C.

Tax audits will be reduced in 2013

When individuals receive IRS audit notifications, it is common for stress levels to rise. The fear can be very real for both individuals and business owners. Several questions of panic come to mind. Was all income accounted for? Were deductions completed in accordance with the law? This is because if an audit is handled improperly, it could result in significant consequences, including criminal prosecution.

Some may be relieved to learn that U.S. tax collectors plan to reduce auditing by 18 percent for the largest U.S. companies in 2013. This is a significant reduction in comparison to the two previous years, the Chicago Tribune reports. Moreover, according to recent data from the Transactional Records Access Clearinghouse (TRAC), auditing for individual taxpayers is also slowing down. IRS audits dropped 5.3 percent in 2012. However, while the audits for individuals were in smaller number, tax reviews of those with incomes over $200, 000 and $1 million increased in this same year.

As reductions in tax inspection continue, large corporate audits are still relatively high, historically speaking. In fact, 17 percent of these larger companies faced audits in 2012. Nevertheless, as IRS employees reduce in number due to budget issues in the struggling economy, audits will fall.

Few individuals or businesses intentionally misreport their taxes; yet, simple mistakes could create weighty repercussions. After all, tax law is very complex and multifaceted. If you are at odds with the IRS after an audit, you may benefit from the assistance of an experienced criminal tax attorney.

Source: Chicago Tribune, "Tax audits less likely this year, group suggests," April 10, 2013

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