IRS 2011 Audit Rates Show Estate Tax Returns under the Microscope
by Terri Eyden on
By Frank Byrt
The IRS scrutinized estate tax returns more than any category of individual tax returns in tax year 2011, at close to a 30 percent rate of examination, while individual income tax returns with $1 million or more in income saw a slight decline in audit coverage, according to the "2012 Internal Revenue Service Data Book," issued March 25.
The "2012 Internal Revenue Service Data Book," summarizes IRS activities for its fiscal year, which ran from October 1, 2011, to September 30, 2012.
The 12,582 estate tax returns filed in tax year 2011 had a 29.9 percent rate of audit by the IRS, compared to 18.2 percent last year, while estates with assets of $5 million up to $10 million had a 58.6 percent rate.
Those estate returns with assets of $10 million or more had an effective 116 percent rate of audit, as the IRS also examined returns in that category filed in prior tax years, in addition those filed in 2011, and included them in the total fiscal year 2012 activity.
The estate tax is a tax on the transfer of property at a taxpayer's death which is based on the fair market value of the deceased's assets, including cash and securities, real estate, insurance, trusts, annuities, business interests, and other assets.
During fiscal year 2012, the IRS assessed almost $26.9 billion in civil penalties. Slightly more than half of that amount, $13.6 billion, was assessed in civil penalties on individual and estate and trust income tax returns.
You may like these other stories...
There's still time to take advantage of last-minute, tax-saving moves for dependency exemptions. For 2014, there are bigger dependency exemptions, as well as rules that, in some cases, are dauntingly complex.The 2014...
Tesco accounting probe finds “inappropriate behavior” by staff – reportsClare Hutchison of Reuters wrote on Sunday that an investigation into a 250 million-pound ($402 million) profit overstatement at...
Did you ever feel as if you're preparing taxes in the Twilight Zone? You may be more right than you think. Each year, professional preparers all over the country have to work in a shadowy reflection of the normal tax...