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Fewer top earners are being audited by the IRS

On Behalf of | Jun 6, 2019 | Tax Audits

According to ProPublica, taxpayers in Georgia who make less than $20,000 a year may face the same chance of being audited as those in the 1% of top earners. In many cases, low-income individuals face audits because they claimed the Earned Income Tax Credit (EITC). The EITC audit process is automated, which makes it easier for the government to perform in a timely manner.

It should be noted that low-income individuals are not necessarily being audited at a higher rate. Instead, those who are in the top income brackets are 80% less likely to face an audit when compared to 2011 figures. In that year, 8% of taxpayers making $500,000 or more were audited whereas they were audited at a rate of 1.3% in 2018. ProPublica did say that the audit risk associated with claiming the EITC may have dissuaded thousands of families from doing so.

Taxpayers are encouraged to take any deductions or credits that they can prove that they are entitled to. Even if an individual is audited, it does not mean that he or she made an error when filing a tax return. Instead, it simply means that the government needs more information to verify what was communicated on a tax return. Those who don’t feel comfortable negotiating directly with the IRS can hire an attorney to negotiate for them.

This may prevent a taxpayer from accidentally saying or doing anything that may widen the scope of an audit or otherwise cause it to last longer than necessary. It may also allow a person to focus on running a business, going to school or otherwise living their lives while the audit process plays out. In some cases, an audit may reveal that an individual is entitled to a larger refund from the government.

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