We nailed the bottom of the market (reference post on Feb 11th) and it’s been a nice ride back up to the top of the range. For the past 8 weeks this move higher has frustrated many as it has been doubted the entire way. It seems everyone was waiting for the next crisis to roll the market back over. I’ve indicated to clients that until you see the sentiment shift to bullishness the run would probably continue. And now we may have something that marks a short term pause in the up move, a headline I found yesterday:
The probability of an IRS audit is fairly low, unless you have income greater than $1M. The numbers below are the audit coverage ratios (published by the IRS) based on the percentage of tax returns in each category audited during the year. We’ve covered some of the redflags that trigger audits in the previous posts, but here are the statistics:
Type of Tax Return Audited Fiscal Year 2015 Fiscal Year 2014
All individual tax returns 0.84% 0.86%
Individual tax returns reporting income of $1 million and higher 9.55% 7.50%
Individual tax returns reporting income of $200,000 and higher 2.61% 2.71%
Individual tax returns reporting income of less than $200,000 0.76% 0.78%
Partnership tax returns 0.51% 0.43%
S corporation tax returns 0.40% 0.36%
Large corporation tax returns 11.15% 12.23%
(courtesy of The Tax Book.com)
