Because maybe there is somebody watching me. And that somebody is Uncle Sam.
Yep, fresh off our firm’s annual unemployment compensation audit (we’ve been chosen almost every year in a random audit – luckily, no worries), I read today that IRS released a report that more than 1.2 million individual federal income tax returns (forms 1040) were audited in fiscal year 2005, a more than 20% increase from 2004. In 2004, the IRS had noted a nearly 20% increase in audits. Are you getting a picture here?
On the corporate side, it’s no secret that the IRS is targeting s corporations for audits.
However, on the personal side, it appears that the IRS might be gunning for individuals with an income of more than $100,000. Almost 20% of the individual audits this year focused on that tax bracket, the highest figure in ten years. Ironically, there were just as many audits for those reporting under $25,000… Somewhere, the middle class just might be breathing a sigh of relief (and this is perhaps the only tax “relief” granted to the middle class this year!).
