14 THE QUEENS COURIER • MARCH 23, 2017 FOR BREAKING NEWS VISIT WWW.QNS.COM TAX TIPS The Decline of Audits BY JOHN SAVIGNANO As IRS keeps watch over taxpayers…it is struggling on the enforcement front, due in large part to severe cutbacks to its budget, dwindling employee head count and a heavier workload. Audits are continuing to decline rapidly. Last year’s individual exam rate fell to 0.7 percent, which translates into one out of every 143 returns. Th e bulk of these audits were correspondence exams done by mail, usually focusing on one or two issues. Th e Service did more than 190,000 fewer audits than in 2015. And 2016 was the fi ft h consecutive year that the audit index has gone down. In 2011, 1.11 percent of returns were examined. Th e drop in exam coverage applies to all income classes… off by 14 percent for fi lers with incomes under $200,000 and a whopping 28 percent for higher-incomers. Individuals with incomes of $200,000 or higher had an examination rate of 1.7 percent—one in every 59 returns—compared with 0.65 percent for those with lower incomes. Millionaires still face higher audit odds when compared with other taxpayers. But their audit rate is also down: 5.83 percent of returns reporting incomes of at least $1 million were audited in 2016, compared with 9.55 percent in 2015. All types of businesses, large and small, felt less audit heat last year. 2016’s overall business examination rate was 0.49 percent... down 17 percent from 2015. Exam rates for partnerships and S corporations were 0.38 percent and 0.34 percent, respectively. Last year, IRS examined 9.53 percent of corporations reporting assets of $10 million or more, compared with 11.15 percent in 2015. In 2012, almost 18 percent of these big fi rms were audited. Criminal tax investigations are plummeting, too, according to IRS statistics showing that just 3,395 criminal proceedings were initiated in the 2016 fi scal year…12 percent fewer than in 2015. Most of the agency’s investigative priorities were impacted, such as identity theft , money laundering and tax refund fraud. Cases on the rise involve payroll taxes, public corruption, health care fraud and overseas operations. Staffi ng levels are at their lowest in decades. Because of budget constraints, the agency can’t replace the ever-growing number of employees who are retiring. IRS’ audit staff has fallen by over 2,500 revenue agents over the past 10 years. About 1,150 fewer special agents are working on criminal cases than 20 years ago. Th e Federal Law Enforcement Offi cers Association has even called on Congress to take the criminal investigations unit and put it directly under the Treasury Dept. Lost W-2 You’re ready to fi ll out your 2016 return but haven’t yet received your W-2. What do you do? First contact your employer and ask for a copy of the form. If that doesn’t work, you can call IRS, which will send a letter to your employer. You’ll need the company’s name, address and phone number, dates of employment and an estimate of wages and tax withheld, which you can get from your fi nal pay stub. Don’t fi le your return late. If you still haven’t received the W-2 by early April… April 18 is the fi ling due date…fi le your return anyway and attach Form 4852. Th is is a substitute W-2 form on which taxpayers should estimate their wages and taxes withheld to the best of their ability. Using a year-end pay stub will help. John Savignano is a partner with Savignano Accountants & Advisors located at 47-46 Vernon Blvd., Second Floor, in Long Island City. For questions, dial 718-707-0955. E-Z Tax Service of NY Inc. ������������������������������������������������������������������������������������ 347-438-1844 Income Tax Preparation ���������������������������������������������������������������������������������� Call Now & End Your Tax Nightmare! �������������������������������������� �������������������������������������� �������������������������������� �������������������������������������������������� ������������������������������������������ Co-Author of the best selling book “Breaking the Tax Code” �������������������������������� �������������������������������� Salvatore P. Candela, EA, ATA, ABA Enrolled Agent - Tax Advisor ���������������������������������������������������������������� ������������������������������������������������������
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