What’s Your Chance of Being Audited?

The IRS has updated its audit guidelines, including the section on audit selection. It simplifies, or tries to simplify, the answer to one of life’s greatest mysteries - what are the chances of you being selected for a tax audit?


There are no doubt triggers such as outsize or oddball deductions that are well above the average for your tax bracket.

However, returns may still be selected for audits even if there’s no such red herring or error. You could end up being audited due to any of the following:-

-          Lousy Luck - The system randomly picks returns based on a statistical formula which has nothing to do with what’s in the returns.

-          Document Matching – If the information you report doesn’t match what’s on payor forms such Form W2 or Form 1099.

-          Business Partners – If your business partners of investors with whom you have extensive transactions have been selected for an audit, then you may be roped in for one too.

So let’s say you have done everything by the book and there’s nothing wrong with your returns, but there’s still a chance that you could be audited. What do the statistics say about this?

Well, depends on the adjusted gross income you show. According to an analysis published by Nolo.com, the lowest chance (0.73%) of being audited is in the $25,000 to $50,000 range.

It’s still at or below 1% for the expanded range of $25,000 to $200,000. It goes up to varying degrees as your income exceeds or falls below this range.

For example, if you show some income less than $25,000, there’s a 1.22% chance that you could be audited. If you show no income whatsoever, it’s all pain and no gain because your chances of being audited actually goes up to 3.42%.

At the other end, it really starts climbing after $5 million. For those with incomes in between $200,000 to $500,000, the chances of being audited are still only 2.66%.

It’s 5.32% up to $1 million and goes up marginally to 5.38% for those with incomes between $1-5 million.

For those with incomes in between $5 to $10 million, there’s a one in 20 chance that you’ll be picked for an audit from among this group.

For those whose incomes exceed $10 million, the chances of an audit go up to one in three.

Photo credit – house.gov

Fociakadémiai audit: a nyilvánosság „nem szolgálja, ugyanakkor feltételezhetően negatívan befolyásolná a projekt sikerét”

Közérdekű adatként kértük, de nem kaptuk meg az MLSZ által a labdarúgó-akadémiák szakmai működéséről készítetett auditjelentést. Közpénz és közfeladatok vs. üzleti titkok és egy szakmai audit, amit valamiért veszélyeztetne, hogyha kiderülne, hogy milyen hiányosságokat tárt fel. Megkaptuk – és most közzé is tesszük – viszont azt az összefoglalót (PDF), amelyben a jelentést készítő tanácsadó cég mutatja be az audit részletes, de az egyes akadémiákra vonatkozó adatokat nem tartalmazó megállapításait.

Study Lowers Pollution, Scrutinizes Auditing

The structure of the auditing business appears problematic: typically, major companies pay auditors to examine their books under the so-called “third-party” audit system. But when an auditing firm’s revenues come directly from its clients, the auditors have an incentive not to deliver bad news to them.

So: does this arrangement affect the actual performance of auditors? In an eye-opening experiment involving roughly 500 industrial plants in the state of Gujarat, in western India, changing the auditing system has indeed produced dramatically different outcomes — reducing pollution, and more generally calling into question the whole practice of letting firms pay the auditors who scrutinize them.

Read more: http://www.laboratoryequipment.com/news/2013/10/study-lowers-pollution-scrutinizes-auditing

All this audit is saying to me is

  • Fuck moving out
  • Fuck having a family
  • Fuck going to uni
  • Fuck being on a minimum wage (capped index at CPI MINUS 1% per year; ie making everything even more unaffordable)
  • Fuck being disabled even if you have a modest house
  • Fuck paying uni fees back (oh yeah, that’s a nice little sneaky one, moving it from CPI to whatever the loan is set at, close to 7-8% in all likelihood)
  • Fuck wanting to do science or working within the CSIRO
  • Fuck being indigenous
  • Fuck being given grants

Seriously though, does anyone other than big business win? 

GOP loves to hammer on fraud and waste in government, yet it seems the Pentagon is the only federal agency that never is audited. Of course it takes a progressive like Barbara Lee (Oakland, CA) to call for legislation “Audit the Pentagon Act of 2014” — I say we all should help her out and get this petition circulating.

So the most recent suggestions made by Tony Shepherd (chairman of the Commission of Audit) in regards to the budget are mostly a hack and slash of public funding, with a push for a more American style treatment of both healthcare and taxation. Oh and with a huge minimum wage cut which doesn’t seem to help the government in anyway, except that it continues to provide means for the wage gap to increase. 

The audit’s key recommendations

Read More

Today is international accountant’s day, marking the day that Luca Pacioli published “Summa de arithmetica, geometria, proportioni et proportionalità” which contained the first printed descriptions of most of the accounting cycle as we know it today.

You can find out more about the father of accounting here: http://bit.ly/1gub95P

Kailangan bang magsaya o hindi? Hihi. Pero ang mahalaga ay mahalin natin ang ating kurso o trabaho. Cheers co-accountants! =)

Looks like the IRS illegally targeted Jewish groups as well


Yesterday, the bombshell dropped that the IRS illegally targeted conservative groups during the 2012 election season.  As scrutiny increases, it appears that the IRS may have targeted Jewish non-profits as well.

from Jewish Press:

While they are at it, the committee might want to ask the IRS whether their list of targets extended beyond political party discrimination. There is evidence the IRS also targeted pro-Israel groups whose positions were potentially inconsistent with the administration’s.

For example, in 2010, the passionately pro-Israel organization Z STREET filed a lawsuit against the IRS, claiming it had been told by an IRS agent that because the organization was “connected to Israel,” its application for tax-exempt status would receive additional scrutiny.  This admission was made in response to a query about the lengthy reveiw of Z STREET’s tax exempt status application.

In addition, the IRS agent told a Z STREET representative that the applications of some of those Israel-related organizations have been assigned to “a special unit in the D.C. office to determine whether the organization’s activities contradict the Administration’s public policies.”

Z STREET’s lawsuit claims the IRS activity constitutes viewpoint discrimination and a violation of its constitutionally protected right of free speech.  The organization is seeking, among other things, complete disclosure to the public regarding the origin, development, approval, substance and application of the IRS policy to treat pro-Israel organizations differently than it does other organizations.

And at least one purely religious Jewish organization, one not focused on Israel, was the recipient of bizarre and highly inappropriate questions about Israel.  Those questions also came from the same non-profit division of the IRS at issue for inappropriately targeting politically conservative groups. The IRS required that Jewish organization to state “whether [it] supports the existence of the land of Israel,” and also demanded the organization “[d]escribe [its] religious belief system toward the land of Israel.”

read the rest

Now we have the IRS telling organizations to “describe your religious belief system”?  This is clearly unconstitutional. Looks like President Obama’s joke about using the IRS to audit his political enemies may not have been that far from the truth.

F2F: Audit • Emory/Constantine • July 15th 1:00pm
  • Constantine:The lunch failed to reach verbal agreement, but Constantine was already sitting in the restaurant with a newspaper opened on his side of the table, clearly under the impression that his guest would arrive regardless of the written consent or not. Eyes scanned over the printed words, the reading comprehension trained to be faster than the average, but this particular edition was already well-known and less deserving of his attention than to have his sights routinely rise over to the only entrance available. After a few moments, he spotted the blond with a secondary glance at the watch that peeked out from his cuff. On time. He rose from his seat, the air of a gentleman tangling around him seemingly so, while he greeted the other with the hand outstretched for him to take. "It's nice to finally meet you without the screen attached," he spoke, smiling as the seat was reclaimed as soon as Emory took his. "If you don't mind, I'd like to start with a personal curiosity.--What were you told about me before my arrival?"

What Hockey and Corman did today was try to scare us with a number of things they won’t enact, or won’t get through the Senate and be discarded. What they did was cast not just the Abbott government but the Baird, Newman, Napthine and Giles governments and the Liberal Party, into outer darkness, perhaps, forever.

Because they thought they had enough respect, enough stature, enough mana in the wider community, the nation, the world, to dare this nonsense, and they didn’t. They already seemed, after the single aberrant knight (there will never be another), and the search in the wrong ocean for the vanished plane, and the twenty-four billion dollar fighter-bomber that can’t win any imaginable war on any planet we might be on soon, a little crazy. And to make war, after that, on on every ingredient of Australia, and Australia itself (the Federation was broken, they said, and that means Australia was broken) was, on the face of it, barking mad.

Where did they get the idea that we as a nation were so keen to get back into surplus that we’d give up our child’s education, and our mother’s comfort in old age? Who told them we were like that?