Most of us would rather have a root canal without anesthesia than face an IRS audit. Fortunately, your chances of winding up in that particular hot seat are fairly low. Audit odds vary according to how much you earn and how you earn it, but generally range from 0.9% (for incomes up to $200,000) to 12.1% (for incomes over $1 million). That means most of us can take comfort knowing our chances of winding up in the crosshairs are slim.
Now, if you look up “guaranteed audit” in the dictionary, you won’t find it, because it’s two separate words. Still, there is one way you guarantee yourself an audit. And some of your most prominent fellow citizens are working night and day to put themselves in that position. So, how do you get there? Easy . . . just get yourself elected President of the United States!
Take a look at Section 22.214.171.124 of the Internal Revenue Manual and you’ll see it in black and white: “The individual income tax returns for the President and Vice-President are subject to mandatory examinations.” Yikes! As if it’s not bad enough having everyone from the New York Times to the National Enquirer all up in your business, now you’d have to contend with the IRS, too!
Presidential audits are no ordinary examinations. The Internal Revenue Manual spells out the kind of excrutiatingly detailed rules that you might imagine for the “First 1040”:
“The returns should be kept in an orange folder at all times.” (We wouldn’t want to confuse them with the President’s nuclear launch codes in the red folder.)
“The returns should not be exposed to viewing by other employees.” (Of course, Presidents routinely release their returns to the public, so employees without “Double Secret Presidential Clearance” will just have to find them online.)
“The returns should be locked in a secure drawer or cabinet when the examiner is away from the work area.” (Gotta keep those Russian teenagers from hacking in and running up the balance on the President’s American Express!)
The kid-glove treatment doesn’t stop when the audit ends, either. Presidential returns “must be closed directly to the Employee Audit Reviewer in Baltimore Technical Services. The ‘Other’ box in the ‘Forward to Technical Services’ section of Form 3198 must be checked and the examiner should notate ‘President (or Vice-President) Examination; Forward to Baltimore Technical Services.'” That’s reassuring — can you imagine how embarrassing it would be send the Presidential return to the wrong archive!
On the bright side, if you do find yourself having to put up with that mandatory annual audit, you’ll get some nice perks out of it: a fleet of limousines, a comfy jumbojet for avoiding the TSA’s usual “perp walk,” and a roomy white house on 18 acres in the middle of Washington, DC. You can even walk to work! Still, there might be a nagging feeling in the back of your mind, knowing the IRS has isolated your return like an Ebola specimen — in it’s own special orange folder, under lock and key.
We realize that you aren’t getting ready to move to 1600 Pennsylvania Avenue. But we make sure that our tax planning advice can stand up to a Presidential-level audit. It all starts with a proactive plan to take advantage of every legal deduction, credit, and strategy to cut your tax. So call us for that plan, and you’ll have more to contribute to your White House run!