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Beware: IRS audit rates up across the board

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in Small Business Tax,Small Business Tax Deduction Strategies

The IRS has released the new “Data Book” (IRS Publication 55B) for its 2010 fiscal year spanning Oct. 1, 2009, through Sept. 30, 2010. (IRS Internal News Release 2011-27)

Alert: Tax audits of individual taxpayers went up, especially for high-income folks. Other changes were revealed for taxpayers with total positive income (TPI) between $200,000 and $1 million, businesses with gross receipts of $25,000 and higher, and individuals claiming the earned income credit (EIC). Here’s the lowdown.

Individuals

Of the 142,823,105 total individual income tax returns filed, 1,581,394 were audited. This works out to approximately 1.10% or 0.10% higher than the 1.00% rate for the previous year. Of the total number of individual income tax returns audited in 2010, 473,999 (30%) were for returns with an EIC claim (down from 35.64% of all audited returns for 2009).

Only 21.7% of the individual audits were conducted by revenue agents, tax com...(register to read more)

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