IRS AUDITS - HOW TO AVOID THEM
According to the Associated Press, the best way to avoid an IRS
audit is to earn less than $200,000. Tax returns showing less than
$200,000 go unaudited 99 percent of the time, according to the AP report.
For those with income above $200,000, there is a 3% chance of audit.
Earnings of $1 million or more are audited 6% of the time. These
percentages apply to both single filers and joint returns.
Another bonus for those under $200,000 in adjusted gross income is
that the number of audits for that category remained constant from 2008
to 2009. On the other hand, the numbers of audits rose 11 percent for
those with more than $200,000 in income, and 30 percent for returns
showing $1 million or more in income.
According to the AP report, the IRS conducted a total of 1.4 million
individual return audits during the financial year ending September 30,
Although not mentioned in the AP report, it is widely thought in the
1031 exchange industry that participating in an exchange is not in
itself any sort of red flag or trigger for additional scrutiny.