As the tax deadline draws near, there are likely some filers this season who may have “exaggerated” a bit on their returns.
As previously reported by FOX Business, a number of Americans have admitted to taking certain “liberties” on their returns, including everything from fudging postmarks to getting creative with deductions.
Clearly, some taxpayers do not believe they will be targeted by the IRS.
Turns out, the odds are probably in their favor.
SportsInsider.com's resident oddsmaker James Murphy estimated that the odds an individual will be audited this year are around 1 in 175. That is less than the odds of meeting your spouse on a blind date (1 in 35), serving on a jury (1 in 50), an applicant being accepted by Harvard (1 in 18) or the odds that an adult showers less than once a week (1 in 100).
Your odds of being audited, however, are higher than being born with 11 fingers or toes (1 in 500) or catching a foul ball at a Major League Baseball game (1 in 1,000).
In reality, odds tend to vary depending on your income level.
Typically higher-income households are more likely to be targeted, though even those chances are relatively low when compared with prior years. One notable exception is that people who claimed the earned income tax credit were twice as likely to be audited than those with incomes between $200,000 and $500,000, according to ProPublica. These people accounted for 36 percent of all audits in 2017.
In 2017, the IRS screenedOpens a New Window. just 0.62 percent of individual returns. It was the sixth consecutive year of decline. Of high-income households, which are expected to be audited at a higher rate, just 4.37 percent of returns were reviewed, while the rate for taxpayers with incomes below $200,000 was 0.59 percent. Business audits also dropped.
The number of auditors working at the agency has also dropped about 30 percent since 2010, falling under 10,000 for the first time since 1953, to 9,510 in 2017.
The agency also has fewer resources to go after negligent taxpayers.
The number of nonfilers pursued dropped to 362,000 in 2017, from 2.4 million in 2011, ProPublica reported.
Experts have told FOX Business that at some point, a lack of enforcement is going to affect the probability of noncompliance.
In testimony before Congress on Tuesday, IRS Commissioner Charles Rettig said he has “both eyes focused on enforcement,” despite the fact that the fiscal 2020 budget requests less money for enforcement. The taxpayer compliance rate, he noted, is around 83 percent.
As reported by SportsInsider.com, here are the tax audit betting odds for this year.
ODDS THAT AN INDIVIDUAL WILL BE THE SUBJECT OF AN IRS FEDERAL INCOME TAX AUDIT
Yes +25000 (250 to 1) No -50000 (1 to 500)
ODDS THAT AN INDIVIDUAL FILING A HARD COPY (PAPER) RETURN WILL BE THE SUBJECT OF AN IRS FEDERAL INCOME TAX AUDIT
Yes +350 (35 to 1) No -700 (1 to 70)
ODDS THAT AN INDIVIDUAL FILING AN ELECTRONIC RETURN WILL BE THE SUBJECT OF AN IRS FEDERAL INCOME TAX AUDIT
Yes +30000 (300 to 1) No -60000 (1 to 600)
ODDS THAT AN INDIVIDUAL REPORTING NO INCOME WILL BE THE SUBJECT OF AN IRS FEDERAL INCOME TAX AUDIT
Yes +2500 (25 to 1) No -5000 (1 to 50)
ODDS THAT AN INDIVIDUAL REPORTING INCOME BETWEEN $1 AND $25 THOUSAND WILL BE THE SUBJECT OF AN IRS FEDERAL INCOME TAX AUDIT
Yes +7500 (75 to 1) No -15000 (1 to 150)
ODDS THAT AN INDIVIDUAL REPORTING INCOME BETWEEN $25 THOUSAND AND $50 THOUSAND WILL BE THE SUBJECT OF AN IRS FEDERAL INCOME TAX AUDIT
Yes +45000 (450 to 1) No -90000 (1 to 900)
ODDS THAT AN INDIVIDUAL REPORTING INCOME BETWEEN $50 THOUSAND AND $75 THOUSAND WILL BE THE SUBJECT OF AN IRS FEDERAL INCOME TAX AUDIT
Yes +37500 (375 to 1) No -75000 (1 to 750)
ODDS THAT AN INDIVIDUAL REPORTING INCOME BETWEEN $75 THOUSAND AND $100 THOUSAND WILL BE THE SUBJECT OF AN IRS FEDERAL INCOME TAX AUDIT
Yes +40000 (400 to 1) No -80000 (1 to 800)