Chandler, AZ -- (SBWIRE) -- 03/06/2014 -- Tuesday, March 5, 2014, The President delivers remarks on the 2015 Budget Plan in Powell Elementary School in Washington D.C. The new budget plan embarks on job creation, job training and education through Tax Reforms.
“Last summer, I offered a proposal to couple business tax reform with critical investments in infrastructure. This Budget includes that proposal, using the transition revenue that will result from a shift to a simpler, more efficient tax code to create jobs rebuilding our roads and bridges and unclogging our commutes and transporting goods made in America—because in today’s global economy, first-class jobs gravitate to first-class infrastructure,” says the President.
This is further discussed in the Department of Treasury funding initiative and reform. It proposes a multi-year program integrity cap adjustment for the IRS, including $480 million in 2015, to deliver additional resources to critical tax enforcement and compliance functions that reduce the deficit and narrow the tax gap by nearly $6 for every $1 spent once fully implemented, with total savings of $35 billion over the next 10 years.
What does this imply?
With the new tax reforms, it is expected that efficient Tax audits will be enforced on all business across the country. Many suggest that structural changes will greatly affect the wealthier citizens to help the poor. In effect, threat of a tax audit is on the rise more than ever.
According to recent data, Taxpayers earning below $200,000 filed more than 136 million returns. Most of which were subjected to an actual audit with an auditor. About 1,076,221 have received correspondence that request for verification of items and returns. In total, 1.01% was subjected to correspondence audits.
In addition, one in every eight taxpayers was being audited. Those who have earnings of more than $200,000 are likely to be audited than others.
There are ways on how to survive tax audits. Hire a tax professional, plan taxes and keep books for three years. In most cases, tax audits happen when there is an error on returns. Most were math mistakes and mismatched interest and dividend reporting which can easily be corrected by a tax professional. A tax professional can also overlook your tax deductions and recognize red flags for full audits. IRS does audit from 18 months up to three years so it is safer if records are being kept up to 36 months.
Though there isn’t a given formula on tax audits, the bigger you make, the more likely you will be audited. Hence, taxpayers have to be more careful and minimize exposure on returns.
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