What is my risk a federal income tax audit by the IRS?
One of the most dreaded life events, outside of one’s death, is an IRS federal income tax audit. By some research, Americans worry more about an IRS audit than they worry whether a dire accident will befall them. But should we really be concerned? The most recent information on IRS enforcement results has the risk of audit at 1-in-99, or less than your chances of dying in a transportation accident. And even that is not quite as bad as it may seem. The IRS has had great success with relatively painless correspondence audits, whereby it requests additional information from taxpayers by letter. Most of us would not consider that a “real” audit. Face-to-face audits are scarier. These involve hours, days or even weeks of reviewing records and receipts in excruciating detail with an IRS representative. Face-to-face audits also can be costly. Engaging CPAs, tax attorneys and other professionals to defend themselves can cost a taxpayer. Perhaps most frightening is the bill that the IRS may sti
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