Audit Risk
2/22/2012

By: George Sugden, CFP®
Financial Representative

This is the time of year when tax filers have anxiety about being a potential target of an IRS audit. The goods news is that your odds of being audited remain low. Here are the individual audit statistics from 2011 as reported by the Internal Revenue Service in the Fiscal Year 2011 Enforcement and Services Results Report ¹:

• The overall audit rate was 1.11% or one out of every 90 returns.
• Taxpayers with income in excess of $1 million received the most audit inquiries with about 1 in every 8 being audited.
• Taxpayers with incomes between $200,000 and $1 million were audited at a rate of 1 in 25.
• Taxpayers with income less than $200,000 saw there returns audited around 1.02% of the time.

The overall audit rate remained constant for individual filers in 2011. For more information on potential audit triggers as reported by Kiplinger, see https://www.kiplinger.com/features/archives/12-audit-red-flags-the-irs-looks-for.html.

Please contact your tax preparer for any additional questions or concerns.

1. IRS.gov, newsroom, The Enforcement and Services Results for FY 2011
http://www.irs.gov/pub/newsroom/fy_2011_enforcement_results_table.pdf

M.J. Smith and Associates is an Independent Registered Investment Advisor
Securities offered through Raymond James Financial Services, Inc.
Member FINRA/SIPC