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Audit rates falling for taxpayers in most income brackets

In 2018, only .59% of federal tax returns were audited. This was a decrease from 2017; in fact, it was the seventh straight year in which overall audit rates decreased. Taxpayers in Georgia and elsewhere who made more than $10 million also saw their audit rate decline in 2018. In that year, 6.66% of such returns were audited compared to 14.52% in 2017 and 34.69% in 2015.

Wealthy Americans at a lower risk of being audited

In fiscal year 2018, Georgia taxpayers and others who made at least $10 million saw their audit rate fall to 6.66%. In fiscal year 2017, the audit rate for those making at least $10 million that year was 14.52%. Audit rates also dropped for those who made between $1 million and less than $10 million in fiscal year 2018. This cut in audit rates for higher earners comes after the tax code overhaul in 2017.

An overview of the new IRS tax form

Georgia taxpayers will need to get ready for the new W-4 form that the IRS is rolling out for next year. The government agency says that the goal of the new form is to make sure that taxpayers owe as little as possible at the end of they year. Ideally, neither the government or a taxpayer will owe the other any money at tax time. However, the new form will require taxpayers to provide more information.

What happens if a tax bill goes unpaid

Taxpayers in Georgia and anywhere else who don't pay their federal income taxes on time could be subject to IRS collection activities. The first step in the process is to send a letter detailing how much the government thinks is owed. Typically, the balance will include penalties and interest in addition to the principal balance. The next step in the process may be to file a lien, garnish wages or seize other assets to satisfy the debt.

Actions that may lead to an audit

It is unlikely that an individual in Georgia or anywhere else will have his or her tax return selected for audit. Overall, just 0.6% of returns will face further scrutiny after they are sent to the IRS. The odds of an audit are influenced by how much money a person makes. Those who make $10 million or more have an audit rate of 14.4%, but money is not the only factor in determining whether a return will be reviewed.

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