Questions:

• Why do you think the percentage of returns that get audited is so low? Explain your reasoning.
• Why do you think that taxpayers are so afraid of being audited? Is their fear warranted?
• Do you think that low audit rates can contribute to more taxpayers "cheating" on their tax returns? Why or why not?

Click here for the ready-to-go slides for this Question of the Day that you can use in your classroom.

Behind the numbers (Accounting Today)

Most taxpayers envision Internal Revenue Service audits as intrusive investigations resulting in criminal sentences. Today, nothing could be farther than the truth: The IRS’s auditing power has been greatly diminished in the past decade. IRS audit resources have been reduced by 28 percent in the last decade and the audit rate has dropped from 0.9 percent in 2010 to 0.5 percent in 2018. In fact, the number of IRS audits in 2018 (991,168) dropped by almost half compared to 2010 (1.735 million).

------------------------

Give your students practice filing their taxes using the TurboTax simulation. 

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

More posts by Tim