Chief Prognosticator

A Tax Audit in Your Future?

Uh Oh, the IRS might be coming for you and you probably don’t deserve it! How? Well the IRS has announced a program of 13,000 random audits over the next 3 years. That’s right — random. You could be making $20,000 a year and get audited by Uncle Sam. Why are they doing this? Do they expect to find tax cheats through a (small) random sample? No! The IRS is conducting this program in order to gather data for their proprietary tax analysis algorithms. You see there exists a so-called “Tax Gap” of over $345 billion a year. In order to close this gap, the IRS invests heavily in improving their software to help detect anomalies in tax returns to better find the cheats. As for the 13,000 random folks, that’s just to add data for testing. But don’t think that if they find something “out of the ordinary” with your return, they won’t penalize you! Beware!