For both consumers and corporations, the lower the income, the higher the rate of tax penalties, according to new research.
The research, from the personal finance social network WalletHub, found that audited consumers who earn less than $200,000 a year pay 83 percent higher penalties as a percentage of their adjusted gross income than people making more than $200,000.
Similarly, audited corporations that earn between $250,000 and $1 million pay more than 11 times higher penalties, as a percentage of their adjusted gross income, than corporations earning between $10 million and $50 million, according to WalletHubs research.
Conversely, individuals who make $10 million or more are 3,933 percent more likely to be audited than those who make between $25,000 and $100,000.
Individual taxpayers and small businesses have a 1 percent chance of being audited, compared to 15.80 percent for large corporations.
Individual audit rates have declined in recent years, while corporate audit rates have increased, the report noted.
See the complete report here.
Michael Cohn is the editor-in-chief of accountingtoday.com
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