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.
Whether it’s Caller I.D. or the return address on an envelope in your mailbox, no one likes to hear from the IRS. Audits are never good news. And it’s not just income taxes that are subject to them.
Estate tax return audits can be especially bad news. First, the estate tax return itself must be filed within nine months following the death of the loved one who owned the assets subject to the return. Second, to make matters worse, the IRS seems to be upping pressure on estate tax returns more than any other.
With tax season dying out for most of us (if you haven’t filed for an extension), the last thing you might want to hear about are audits of any kind. Nevertheless, the fiscally-minded writers at AccountingWeb want to warn taxpayers about this apparent IRS interest in estate tax returns in an article titled “IRS 2011 Audit Rates Show Estate Tax Returns under the Microscope.“
Bottom line: take this as fresh evidence to cross your “t’s” and dot your “i’s” when it comes to your own estate planning.