A TAXING TIME OF YEAR
Orange Countians worrying about their probability of being audited might take heart at the numbers below. During the last fiscal year--from Oct. 1, 1988 to Sept. 30, 1989--just 1 in 100 individuals and 2 in 100 corporations were called upon to justify what they claimed on their income tax returns. While the 1988-’89 estimate is the lowest for individuals during the last five years, it is the highest for corporations.
The Internal Revenue Service divides audits into two categories, random and selective. The random audit is just that--anyone can be called upon and the information gathered is used to figure out statistical norms among taxpayers. The selective audit targets those people whose claims deviate from pre-established guidelines--for instance, if someone claims he donated 60% of his income to charity or ate his way through $90,000 worth of business dinners.
The following lists tax information for Orange County over the last five fiscal years.
Estimated Estimated Estimated % of Year/ Total Total Returns Estimated Type of Return Returns Audits Audited Revenue 1984-1985 Individual 790,302 13,337 1.7 $3,583,706,750 Corporation 22,651 319 1.4 445,028,500 Total * 1,401,590 14,400 1.0 $4,123,986,750 1985-1986 Individual 829,925 12,450 1.5 $4,000,971,750 Corporation 26,372 334 1.3 517,955,750 Total * 1,534,705 13,604 0.9 $4,622,906,000 1986-1987 Individual 858,743 11,651 1.4 $4,738,959,000 Corporation 28,365 230 0.8 526,366,750 Total * 1,608,155 13,700 0.9 $5,372,546,250 1987-1988 Individual 898,822 11,236 1.3 $5,149,069,000 Corporation 28,647 305 1.1 505,438,250 Total * 1,638,189 12,083 0.7 $5,766,736,000 1988-1989 Individual 951,671 8,565 0.9 $5,903,857,000 Corporation 30,428 609 2.0 475,864,500 Total * 1,410,294 9,839 0.7 $6,513,659,651
Estimated Year/ Additional Tax Type of Return and Penalties 1984-1985 Individual $67,183,000 Corporation 81,457,500 Total * $165,445,000 1985-1986 Individual $80,121,500 Corporation 36,037,500 Total * $125,879,250 1986-1987 Individual $57,536,750 Corporation 128,056,500 Total * $194,987,500 1987-1988 Individual $53,878,750 Corporation 153,804,250 Total * $219,398,750 1988-1989 Individual $38,016,000 Corporation 90,419,000 Total * $137,425,450
* Includes individuals, corporations and other entities subject to taxation.
Source: Internal Revenue Service, Laguna Niguel
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