December 16th, 2010
06:00 PM ET

Could you pass an IRS audit?

FROM CNN's Jack Cafferty:

If you're scrambling to do some end-of-the-year tax planning, you might want to consider this:
[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2010/images/12/16/art.irs.jpg caption=""]
The Internal Revenue Service increased the number of returns it audited by 11 percent this year - that's according to the Associated Press.

The tax agency was most likely to target wealthy taxpayers and big businesses; but it also audited more charities and other tax-exempt groups.

In total - the IRS audited more than 1.58 million individual returns; up from 1.43 million the year before. Officials say it's the highest rate of individual audits in the last decade.

And, that translates to more than one percent of individual returns that were audited. But the richer you are, the more likely you are to get audited:

Those making more than $1 million had an audit rate of more than eight percent; and people making more than $200,000 had an audit rate of more than three percent.

As the country struggles to come up with a solution for our skyrocketing national debt, "tax reform" is a phrase we hear more and more often.

Undergoing an IRS audit is only a slightly bigger nightmare than making your way through our ridiculously complex tax code.

The problem with tax reform is there's a powerful lobby in Washington representing tax lawyers, accountants and money managers who will probably fight any effort at reform tooth and nail.

So for this year, you better get it right the way it is.

Here’s my question to you: Could you pass an IRS audit?

Tune in to the Situation Room at 6pm to see if Jack reads your answer on air.

And, we love to know where you’re writing from, so please include your city and state with your comment.

Filed under: Tax Returns • Taxes
soundoff (54 Responses)
  1. Olga

    The IRS audited my business and as I handed them my information in boxes, they explored all data and cross checked invoices, checks and receipts.

    It took them several months to finish and after going through the file meticulously, they found nothing.

    This exercise in futility was nothing compared to the stress I experienced.. I owned a small business and thought to myself, why are they not going after the big boys who really get away with stuff?

    The IRS really needs to have a good reason to conduct these audits. They are an autonomous body and no one to answer to. They have a free rein and reign supreme.

    Austin, Texas

    December 16, 2010 at 1:05 pm |
  2. George in PA

    Yes and they'd probably find that I had over paid since I like most Americans don't have a team of accountants looking for every loop hole. When will they ever go to a flat tax and learn to "keep it simple stupid!".

    December 16, 2010 at 1:08 pm |
  3. Janne from NC

    I could probably do as well as Geitner, Rangle or Dashle. ( or Kerry trying to register his yacht in another state for lower taxes) I wonder if I could get the same deal they got from the IRS if I got caught

    December 16, 2010 at 1:10 pm |
  4. Gary Bellew

    If the IRS had a form that read "what did you make? Please remit all monies received from any source."

    December 16, 2010 at 1:17 pm |
  5. Russ in PA

    Could you?

    How about Tim Geitner? Could Ben Bernanke? Could Chis Dodd? Could Nancy Pelosi? Could John Boehner? Oh, wait, they don't need to...

    December 16, 2010 at 1:20 pm |
  6. Bob K. Ohio

    No one can pass an IRS audit. Even employees of the IRS do not understand all the laws. Just call the IRS and ask the same question on three or four different occasions and you will get three or four different answers. Pick the wrong supposedly correct answer and you loose.

    December 16, 2010 at 1:27 pm |
  7. John Walters

    Jack, i am currently undergoing an IRS audit and i'm afraid the odds of passing it is as slim as that of President Obama winning a second term or Sarah Palin winning the Republican primaries in 2012.

    December 16, 2010 at 1:40 pm |
  8. Dean Marchant from Oregon writes

    Yes Jack, I barely make enough to have to worry about filing an income tax report. It's the people making 250,000 and more that have a problem being honest.

    December 16, 2010 at 1:52 pm |

    tampa, fl sure, np. i'm on disability, my wife is on social security retirement. we have next to nothing, get next to nothing, and yet still file every year like when we both had jobs. never got audited then either. when you don't lie or cheat on your 1040 one has nothing to fear.

    December 16, 2010 at 2:18 pm |
  10. Tom, Santa Barbara CA

    Yes, my finances are uncomplicated. I make a certain amount, and pay a certain fraction.

    December 16, 2010 at 2:22 pm |
  11. Kevin of SD CA

    For those of us whom use ethical CPAs to do our taxes this should not be a problem! The question is, “Why doesn’t the government reimburse me for my loss of time and money to pay for their unlawful invasion into my privacy, and private property”? I want to see a flat tax of some sort that does away with expensive audits and tax preparation costs that are just more extortion for special interest groups, and Tyranny!

    December 16, 2010 at 2:45 pm |
  12. barbara in NC

    Definitely. Most members of my family couldn't, but somehow they got stuck with ONE HONEST person.

    December 16, 2010 at 2:47 pm |
  13. Rich McKinney, Texas

    I have been filing tax returns for quite a few years and have never been audited once. I always keep the last 10 years of returns and receipts just in case though. It would be nice if our government would simply do away with the complicated tax system we have and make a flat tax that each and every person pays on each and everything they consume. That way we all share in the payment of taxes equally based upon what we each consume. The more you consume the more you pay in taxes. A couple of cents on each dollar and then we can scrap the whole IRS and their salaries and insurance and benefits for each of them. Put that money back into the governments coiffeurs and start paying off the deficit with it instead of just some of the interest.

    December 16, 2010 at 2:47 pm |
  14. Bizz Quarryville Pennsylvania

    I most certainly can pass the IRS audit. I filed a short form and claim nothing. There isn't anything more they can get out of me.

    December 16, 2010 at 2:52 pm |
  15. Bradley, Portland, OR

    Yes, I could. All my money comes from wages, and my taxes are withheld. And I think that's true of most Americans.

    This is the kind of question that only a rich guy with lots of investments could ask :-).

    December 16, 2010 at 2:53 pm |

    Could you pass an IRS audit?


    Question is can ALL of our Lawmakers pass one?

    I think that those in the House and Senate should be audited by the IRS EVERY SINGLE YEAR they are in office.

    Those that live/represent states that have State Income Tax should be audited by that state every single year that they hold office as well.

    I can't wait to see what will come out of the IRS audits for the C Street Scandal.

    Roseville CA

    December 16, 2010 at 2:55 pm |
  17. Floyd Burgess

    Hell yes, easily. Can you?

    December 16, 2010 at 2:58 pm |
  18. Larry from Georgetown, Tx

    I beleive we could as we don't need to lie about our deductions like some politicians do who shall remain name less.

    December 16, 2010 at 3:09 pm |
  19. Ed from California

    Absolutely........as long as they don't come over. The price of admission for living in the greatest country on earth, is paying for the privilege of living here. And that price is, taxes.

    We all have to pay our fair share and that share is dependent on how much you make. We all have a choice. We either pay up, or get out. I would like to see our wealthy friends who fight for and pay-off others for the privilege of not having to pay taxes, go and live in another country. A country where it's more suitable for them to live, like China, or perhaps Mexico.

    The very countries that the wealthy few, with help from their elected employees have sent all of our jobs. I wonder if the rich could pass an IRS audit, if that audit was an audit on patriotism, and that goes for their elected employees.

    December 16, 2010 at 3:16 pm |
  20. Rick McDaniel

    Of course.

    December 16, 2010 at 3:21 pm |
  21. KDS Irvine, CA

    Yes because I don't make millions of dollars a year.

    December 16, 2010 at 3:28 pm |
  22. Terry in Chandler, AZ

    That Jack would depend on the year of the audit.

    December 16, 2010 at 3:33 pm |
  23. Karen, Idaho

    Yes, I could. If you understand that as a citizen you have an obligation to pay taxes and you don't cheat, you have nothing to worry about. I don't look for loopholes–I pay what I owe.

    December 16, 2010 at 3:34 pm |
  24. southerncousin

    Since I am a Republican, work for a living, actually paid taxes, accept personal responsibility, am not an executive in the Obama administration or a corrupt union boss, don't do drugs, graduated from high school and never watch Oprah and this is the Obama administration probably I would not.

    December 16, 2010 at 3:38 pm |
  25. Dee in New Paris Ohio

    Of course I could! Since I have basically no income except Social Security I don't know what the IRS could even want with me!

    And if for some strange reason I did not pass, I could simply call one of those companies that advertise on TV (including CNN) that they can help me with the IRS. In fact, those ads make me ill. To think that some business is there solely to help people NOT pay taxes! Am I the only person who finds that to be shameful?

    December 16, 2010 at 3:43 pm |
  26. MNResident

    I file 1040 EZ, and keep records going back 20 years, so why not???

    December 16, 2010 at 3:48 pm |
  27. Conor in Chicago

    Can the FED?

    December 16, 2010 at 3:50 pm |
  28. Steve, Clifton, VA

    Yes, provided that there were competent unbiased auditors conducting the audit...

    December 16, 2010 at 3:59 pm |
  29. Tina Tx

    Ha Ha!!. I don't hardly make enough to put a bead on.....

    December 16, 2010 at 4:07 pm |
  30. David from Herndon, VA

    Beats me. I do my best with turbo tax but there are usually two or three ambiguities with regard to investment income and deductions of one sort or another.

    But it's just like anything else - if I make a small potatoes mistake, I'll pay penalties and interest. If (when?) a rich guy cheats intentionally, the IRS will wind up apologizing to his lawyers.

    December 16, 2010 at 4:19 pm |
  31. Dale,, Ia.

    Been there and done that,,.how about you Jack..

    December 16, 2010 at 4:30 pm |
  32. Loren

    Yes, but then I don't mind paying my fair share of the cost of our government. As frustrating as Congress is with its extravagent habits, our government is a model of efficiency and honesty compared to most others around the world. Now, if Congress could just simplify the tax code, I'd feel even better about paying my taxes.

    December 16, 2010 at 4:33 pm |
  33. Tom Mytoocents Fort Lauderdale, Florida


    If Timothy Geithner Secretary of the US Treasury and top guy at the IRS can't properly compute his tax, the rest of us don't stand a chance. It truly is the blind leading the blind.. Finding candidates for the Supreme Court and Cabinet posts who are tax clean is harder than ever.

    December 16, 2010 at 4:38 pm |
  34. David in Raleigh, NC

    Implement the fair tax plan and all of these headaches go away.

    December 16, 2010 at 4:46 pm |
  35. AndyZag Lynn, MA

    Fer sure. I'm unemployed, 62 years old, and survive at the mercy of my family. So tell me Jack, what does the IRS audit when the taxpayer has zero income? I can't get a job at Walmart, CostCo, any fast food burger flingin' joint. But there is hope, next year I turn 63 and there still might be something left in the Social Security Fund. Why doesn't Congress feel compelled to re-pay the funds they stole/raped from the Social Security Fund?

    December 16, 2010 at 4:46 pm |
  36. Lori, Allentown, Pennsylvania

    I doubt it.

    December 16, 2010 at 4:46 pm |
  37. David in Raleigh, NC

    We need to implement a flat tax.

    Everybody pays the same percentage of what they make no matter how much they make with no deductions, credits, or loopholes.

    If you make $10,000 and the rate is 10%, you pay $1,000. If you make $100,000 and the rate is 10%, you pay $10,000. If you make $1,000,000 and the rate is 10%, you pay $100,000.

    That way everybody has some skin in the game and those in lower income ranges no longer have a reason to vote for politicians who promise welfare entitlements because they won't want their taxes to go up to pay for the entitlement.

    December 16, 2010 at 4:48 pm |
  38. Jeff In Minnesota

    I have all my records, so I should be able to. However, when my father got audited when I was in college, I got audited as well since I was a dependent on his return and had filed my own tax return. It was pretty silly as I had to take a day off from school and spend three hours with an IRS agent fours hours from school so they could audit my 1040-EZ form. Why I had to show up I have no idea as he spent all the time going between my W-2s from my three employers and the form as I had no investments, no mortgage, no deductions of any kind. They tell me the IRS has changed, but I'll believe it when I see it.

    December 16, 2010 at 4:54 pm |
  39. thom richer

    Absolutely. In fact every year for the past 60 plus years if need be. However, that really isn't unusual for the lower income taxpayer. Most of us would probably be proven to have overpaid most years. It's the higher income people who are suspect. You have to have money to hide it or get a tax break.

    Thom Richer
    Negaunee, MI

    December 16, 2010 at 4:56 pm |
  40. Judy

    Jack, yes I could. I am organized, and I save every single receipt. I don't take any deductions without documentation. I like sleeping well at night, and even though I could do my own return, I take it to a trusted professional. Having been in the accounting field myself for many years, I know the good and the bad when it comes to the IRS, and have had first hand experiences that would curl your hair. (If you had any)

    December 16, 2010 at 4:56 pm |
  41. Mike from Denver

    Sure, I learned to hold the meeting on a boat. Auditors seems to get seasick and want to leave quickly.

    December 16, 2010 at 5:08 pm |
  42. Ken in Maryland

    As long as the tax software doesn't mess something up, I should be fine in an audit.

    December 16, 2010 at 5:18 pm |
  43. Birddog in Mississippi

    I could pass, but that's because I don't make jack, Jack.
    They need to pass the reforms suggested by the debt commission. The whole thing would be simpler and fairer. The wealthy don't get to deduct everything under the sun and capital gains get treated just like income. do that and add about five more brackets and we'll be good to go.

    December 16, 2010 at 5:22 pm |
  44. Scott Stodden

    Sure If I Was Rich And Making Thousands Of A Dollars A Year But Me Working A Minimum Wage Job At Burger King Im Lucky To Get Back $1,000 On My Tax Return But That's How America Treats The Middle Class Like Crap!

    Scott Stodden (Freeport,Illinois)

    December 16, 2010 at 5:22 pm |
  45. Remo, from beautiful downtown Pflugerville Texas

    Well Jack, since I made $0.00 I guess I'll get an audit. I can hear the IRS now, "M.r Remo, where are your W-2's"? Me, "I have none". IRS "That's unacceptable! What was your income?" Me," I have none." IRS " Based on our records, you owe $1.1 trillion." Me " How do you figure?" IRS " Well, you're lower than low middle class, therefore you must carry the burden".

    December 16, 2010 at 5:27 pm |
  46. Jared, Pennsylvania

    The IRS will never be fazed out unless both the young and older civilians need to stop being dependent on the nanny state.

    Its time to fight for all your hard earned dollars and get this progressive communist income tax out of our wallets.

    December 16, 2010 at 5:36 pm |
  47. honest John in Vermont

    I'm far less than wealthy so if I get an audit it would have to be a joke and yes I'd pass.

    December 16, 2010 at 5:37 pm |
  48. Rich McKinney, Texas

    Sure Jack. I could pass an IRS audit with flying colors but i bet you that most of the members of congress couldn't. The thing about all of this though is that me they would throw in jail and take everything i ever owned or will own. Politicians on the other hand get a slap on the wrist and are allowed to remain in positions of public trust. That double standard is what divides us and makes us resent government.

    December 16, 2010 at 5:48 pm |
  49. John from Alabama

    Jack: Yes I could pass an IRS audit. The key is to have good records and being able to find them for the last 7 years. An important fact to remember is to get rid of any tax records after 7 years. I know people who had to pay back taxes and penalities because they kept records which were past the 7 years.

    December 16, 2010 at 5:50 pm |
  50. David Gerstenfeld

    I would love to be worried about an IRS audit. Living on social security & some investments with no COLA in years makes an audit highly unlikely.
    David, Las Vegas

    December 16, 2010 at 6:03 pm |
  51. Peg from N.Y.

    You bet! Easy peasy~there is nothing we have to hide, the emloyers took it all away!

    December 16, 2010 at 6:11 pm |
  52. Ken in NC

    Is this a loaded question? I and any other American can pass an IRS Audit with ease as long as the IRS approves of it.

    December 16, 2010 at 6:36 pm |
  53. Greg Turman


    I have only been challenged by the IRS one time in my 57 years. Several years ago I had to pay the IRS a couple of thousand dollars.
    Promply wrote the check in late January & received cancelled check thru my bank in March.
    In April I received a phone call from a person in India challenging my payment in barely understandable English. I had to send a copy of my cancelled check to the IRS.
    Evidently the federal government has been out sourcing government jobs over seas.
    Now with the recent Wikileaks debacle, I do not feel secure in sending in my tax return with my SS number and other financial information.
    The U.S. federal government & the ACLU freedom of information act has given me yet one nore problem to deal with as I approach retirement.
    Come January 2011, I plan to show my 2010 compensation from a private company + private health care benefits paid by the private company as "charity" & hope for the best.
    Gregory Turman

    December 16, 2010 at 6:49 pm |
  54. Ralph Spyer

    The government can't pass a IRS audit.

    December 16, 2010 at 6:50 pm |