Thomson Tax & Accounting Analyst Says the IRS's 2007 Data Book Provides Some Clues
NEW YORK, March 24 /PRNewswire/ -- The IRS has recently released its 2007 data book which provides valuable information about how many tax returns the IRS examines (audits); what categories of returns the IRS is focusing its resources on; as well as data on other enforcement activities, such as collections. According to Bob Trinz, a senior tax analyst at Thomson Tax & Accounting, a business segment of The Thomson Corporation, the data offers a clue of what taxpayers can expect for this year's tax season.
"The odds of your being audited are low -- the audit rate for individuals for Fiscal Year 2007 was about 1% overall," says Trinz. "But the odds go up for returns that are complex or show high income. For example, if you filed a business return showing between $100,000 and $200,000 of total gross receipts, the audit rate was 6.2%, and if you filed a return showing income of $1 million or more, the audit rate was 9%. The odds go up dramatically for taxpayers who claimed an earned income tax credit (EITC) -- 36.5% of these returns were audited." Trinz points out the following statistics from the IRS during relative time periods: -- A total of 1,384,563 individual income tax returns were audited during Fiscal Year 2007 (Oct. 1, 2006 through Sept. 30, 2007) out of a total
of 134.5 million individual returns that were filed in the previous
year. This works out to 1.0% of all individual returns filed (slightly higher than the 0.97% audit rate for the preceding year).
-- Of the total number of returns audited, 503,267 (36.5%) were selected
on the basis of an EITC claim (down slightly from the 40.3% rate for
Fiscal Year 2006).
-- Only 22.49% of the audits were conducted by revenue agents, tax
compliance officers, and tax examiners; the bulk of the audits (about
77.5%) were correspondence audits. These percentages are about the
same as they were in Fiscal Year 2006.
-- The audit rates for individual nonbusiness returns that didn't claim
the EITC are as follows: - For "selected nonbusiness returns" (includes returns without a
Schedule C (nonfarm sole proprietorship), Schedule E (supplemental
income and loss), Schedule F (profit or loss from farming), or Form
2106 (employee business expenses), 0.4%.
- For returns with Schedule E or Form 2106 (excludes returns with a
Schedule C, nonfarm sole proprietorship, or Schedule F, profit or
loss from farming), 1.2%.
-- For returns with total positive income (TPI) of at least $200,000 and
under $1 million, the audit rate was 2% for nonbusiness returns and
2.9% for business returns. For returns with TPI of $1 million or more, the audit rate was 9.3%. About The Thomson Corporation
The Thomson Corporation (http://www.thomson.com/) is a global leader in providing essential electronic workflow solutions to business and professional customers. With operational headquarters in Stamford, Conn., Thomson provides value-added information, software tools and applications to professionals in the fields of law, tax, accounting, financial services, scientific research and healthcare. The Corporation's common shares are listed on the New York and Toronto stock exchanges.
Thomson Tax & Accounting is a business segment of Thomson and a leading provider of technology and integrated information solutions to accounting, tax and corporate finance professionals in accounting firms, corporations, law firms and government. Thomson Tax & Accounting includes the Professional Software & Services, Corporate Software & Services, and Research & Guidance business groups. RIA (http://ria.thomson.com/) and PPC (http://ppc.thomson.com/) are both brands within the Research & Guidance business. DATASOURCE: Thomson Tax & Accounting CONTACT: Nancy Kohler, 1-800-993-7600, ext. 3#, , or Melissa Lande, 1-800-993-7600, ext. 1#, , both of Lande Communications, for Thomson Tax & Accounting Web site: http://www.thomson.com/ http://ria.thomson.com/ http://ppc.thomson.com/
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