We are picking up where we left off (here) with our discussion of the lawsuits over Hollywood legend Mickey Rooney's will. When Rooney died in April, his widow, Jan, told the press she had not seen him for a year. It seems the couple had separated after Rooney accused Jan of elder abuse. They reportedly signed a settlement agreement that included a stipulation that Jan stay away from her husband.
We are back to discussing what the average taxpayer should do if the mails brings an audit notice from the IRS. In our May 16 post, we talked about the odds of being audited -- very slim for someone with an average paycheck -- and the types of things on a tax return that could trigger an audit. For the most part, the IRS is not interested in casting a wide net to scoop up as many taxpayers as possible. The agency is more interested in the people whose returns show anomalies, and the more anomalies, the more likely an audit.
When we wrote in early April (here) about Mickey Rooney's death, we briefly touched on the situation with his estranged wife, Jan. The couple had been married for 36 years, but when Rooney passed away at age 93, Jan told the press that she had not seen her husband for at least a year.
As we said in our May 2 post, the average American taxpayer has a 1 percent chance of being audited by the IRS. The chance increases to 3.26 percent, though, for taxpayers earning $200,000 in 2013. If you earned more than $1 million -- not unheard of in the Bay Area -- your chances increase to almost 11 percent.
An individual is planning on selling their rental home that they have kept as an investment for ten years. They paid $400,000 on the property and have sold it for $500,000. They have also made no capital improvements upon it and are not paying for closing costs or sales commissions. They would then like to pay the $100,000 net profit towards their principal residence.
Although most Americans have already filed their 2013 taxes and are waiting to hear back from the IRS, there are still some who have yet to submit their returns. One of the thoughts on many taxpayers’ minds after submitting their tax return is, “I hope everything was correct.” This is a natural though, and most of us have heard stories about the IRS auditing individuals and businesses for potential tax fraud or evasion.