What is return-free filing and how would it work? Q.What is return-free filing and how would it work? A.If an income tax system were simple enough, the government could withhold taxes owed and do its own accounting at the end of the year without much help from taxpayers. Read more about What is return-free filing and how would it work?
What is the audit rate? Q.What is the audit rate? A.The audit rate is the percent of tax returns filed for a tax year that are ultimately examined by the IRS. About 153.9 million individual tax returns were filed based on 2018 income, but only about 520,000 of those returns were audited—an overall audit rate of 0.3 percent. Audit rates are generally highest for high-income taxpayers, taxpayers with business income, large corporations, and earned income tax credit claimants. Read more about What is the audit rate?
Do all people eligible for the EITC participate? Q.Do all people eligible for the EITC participate? A.The IRS and Census Bureau estimate that almost 80 percent of workers eligible for the earned income tax credit (EITC) claim it. Because people eligible for higher credits are more likely to claim the credit than those eligible for lower credits, about 85 percent of potential benefits are claimed each year. Read more about Do all people eligible for the EITC participate?