audit

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?

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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

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

A small group of nature lovers in Kitchener-Waterloo Region in southern Ontario enjoy spending weekends watching birds and other wildlife, but lately they’re the ones under watch — by the Canada Revenue Agency.

[…]

Earlier this year, tax auditors sent a letter to the 300-member group, warning about political material on the group’s website.

The stern missive says the group must take appropriate action as necessary “including refraining from undertaking any partisan activities,” with the ominous warning that “this letter does not preclude any future audits.”

[…]

The group, with annual revenues of just $16,000, has also had a guest speaker to talk about the oilsands, and has publicly defended the Endangered Species Act from being watered down.

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! =)

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.

Rarely do I have a work week as incredibly hectic as this! I usually have this audit business down, but this week was different. New auditors, new layout, and a LOT of disorganization on the part of some…who shall remain nameless. It’s been a crazy one and I’m SO ready for Friday to be here so I can get some actual work done!

Good thing next week is equally crazy in BOTH work and home life! Oy!