Auditing by IRS isn’t as widespread as it used to be

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People in New York who have been subjected to an audit by the Internal Revenue Service might feel that it’s one of the worst things that could happen to them. Whatever the reason the IRS decided to move forward with its tax investigation, the process of going through an audit is traumatic. That’s why, in practically every case, people would rather not have to go through an audit in the first place.

Well, as it turns out, the IRS has not been as aggressive when it comes to auditing individual taxpayers — and this was true even before the recent government shutdown put nonessential federal employees out of work for a while.

One of the main causes of this is the fact that the agency’s budget has been decreased in recent years because Congress has not allocated as much money as it once did. As a result of the reductions over a three-year period, the IRS had to get rid of about 8,000 full-time employees, more than half of whom audited tax returns. All in all, this led to the agency’s enforcement staff to decrease by about 14 percent — and decrease revenues pulled in by the agency by about 13 percent.

Another reason for the decrease in individual audits is the increase in corporate audits. About 1 in 61 returns at a corporate level were examined in 2012; audits of larger businesses increased more than 75 percent in the last several years.

When someone in New York is facing an audit, that person doesn’t need to go through the process alone. An experienced tax attorney can provide valuable guidance in this situation.

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