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Expect a milder tax season in terms of audits, says IRS

Before you get too excited by the headline on this post, take a breath. It is a fact that the head of the Internal Revenue Service recently reported that his agency will be conducting fewer audits than usual this filing season. But they are not going away by any stretch of the imagination.

According to CNN Money, the expectation is that the IRS will trim its auditing activity, performing only about 1 million of them. That compares with 1.4 million conducted in 2013 and 1.2 million done last year.

From that perspective the reduction doesn't seem all that great and it seems fair to anticipate that officials will want the biggest bang for their buck (or vice-versa) by going after the most obvious taxpayer violators. So, if you happen to receive a letter announcing you are the focus of an IRS examination, it should be taken very seriously.

The reason the agency is planning to do fewer audits is because its budget has been pared significantly in recent years. It is now some 17 percent below what it was 5 years ago. Staff has been cut and activities reduced.

Meanwhile, the agency anticipates it will face challenges this year from the added burden of tracking developments related to the Affordable Care Act. Officials will be looking for individuals who didn't have health insurance coverage and who may be subject to a penalty as a result.

In the face of all the changes that have taken place in the past year, it seems clear that many taxpayers could wind up in a confrontation with the IRS and be uncertain about what to expect and what their rights are. Anyone facing that scenario should be contacting an experienced attorney for help.

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