The Peck Group, LC - Tax Law
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Comprehensive Tax Law Representation Since 1995
We handle every aspect of tax law: preparing tax returns, representing clients during audits, resolving IRS and state tax controversies, and creating tax planning strategies for the future.

What is the likelihood of facing an audit?

On Behalf of | Dec 20, 2021 | Tax Law |

If you file taxes in the United States, something that you should be aware of is the risk of facing an audit. Audits by the Internal Revenue Service are largely random, which can make it hard to know if you’ll be at risk or not.

You may be surprised to know that the IRS only audits around .3% of all tax returns. The majority of audits are done by letter at a rate of around 74%. So, even if you do end up being audited, you may only need to correspond with the IRS by mail.

Are you more likely to get audited today than a decade ago?

IRS audits have been declining over time. Today, you’re around 56% less likely to be audited than you would have been in 2010, even though there are more tax returns filed today than before. In 2020, for example, 157,195,302 tax returns were filed. Only 509,917 of those returns were audited.

Who is most likely to be audited?

Wealthy taxpayers are the most likely to be audited, simply because there is more to gain by auditing their accounts. Statistically speaking, only 1.2% of those claiming the Earned Income Tax Credit and who earn less than $25,000 annually were audited, but around 2.4% of millionaires were. These statistics were for the 2019 tax year.

It is possible that those who earn very little will be audited, but the simple reason for this is that there is a higher chance that they’ve made mistakes on their tax returns. Up to 25% of EITC claims do have errors, according to the Center on Budget and Policy Priorities.

How can you avoid being audited?

There is no foolproof way to avoid being audited. That being said, the IRS tends to look into claims for businesses that report losses, unexpected deductions, meal expenses, auto expenses, and travel deductions. Also, failing to file a return may trigger an audit from the IRS.

If you really want to avoid audits or trouble with the IRS, getting help with your taxes isn’t a bad idea. If an audit does come through for you, then you may want to look into ways to protect yourself.

We insist that your taxpayer rights are protected and your options are known.

Our services are confidential and are protected under the attorney-client privilege as allowed by law.