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...
School tax breaks get House support as Democrats objectRichard Rubin of Bloomberg reported that the House of Representatives on Thursday voted to expand and simplify tax breaks for education as Republicans continue to pass...
Many senior US tax professionals believe that a streamlined audit process will be the top benefit resulting from the IRS Transfer Pricing Audit Roadmap, a new toolkit organized around a notional 24-month audit timeline,...
Tax accounting to be simplified for money-market fundsThe US Securities and Exchange Commission (SEC) voted 3-2 on Wednesday for sweeping changes to institutional money-market funds, Emily Chasan, senior editor of...
Upcoming CPE Webinars
In this session Excel expert David Ringstrom helps beginners get up to speed in Microsoft Excel. However, even experienced Excel users will learn some new tricks, particularly when David discusses under-utilized aspects of Excel.
FRF for SMEs Series--Measurement and Disclosure Principles for various Consolidations and Business Combinations, Part 4B
This webcast will focus on accounting and disclosure policies for various types of consolidations and business combinations.
In this session we'll review best practices for how to generate interest in your firm’s services.
Meet budgets and client expectations using project management skills geared toward the unique challenges faced by CPAs. Kristen Rampe will share how knowing the keys to structuring and executing a successful project can make the difference between success and repeated failures.