Trust Updates Archive
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(April 19, 2011 --Chicago, IL) -- If a fiduciary, estate, or gift tax return filed by your institution is subject to a field audit, there is a better than 85 percent chance the examiner will find an error. That rate is nearly double the chance of finding an error with a letter audit. The dollar impact is even greater. Additional taxes owed following IRS audits of fiduciary, estate, and gift tax returns has nearly doubled since 2007. Of the extra $1.65 billion in additional taxes collected following audits of 2009 returns, nearly 90 percent came from estate tax returns. The spike in additional tax revenues comes as the IRS is reporting declining numbers of fiduciary, estate, and gift tax returns. While the number of returns being filed is shrinking, the number of returns being audited is increasing. Chances of being audited vary greatly based on the type of return filed. Among all types of returns filed with the IRS, including personal and corporate returns, the fiduciary return, the 1041, has the lowest audit rate: 1 in 600. Nevertheless, that is up nearly 40 percent from 1 in 800 in 2007. One of the highest rates of audits is for estate tax returns, the 706. The chances of an estate tax return being audited is better than 1 in 10. For more on this topic, see the current issue of Trust Regulatory News. ******************** No statement in this issue is offered as or should be construed as legal opinion or advice or as an indicator of future performance. To subscribe to Trust Updates or for a trial subscription go to http://www.trustupdates.com/Subscribe/Free_and_Trial/ To unsubscribe to Trust Updates go to To subscribe, click on the link below : • Trust Regulatory News • Trust Performance Report or • Fiduciary Earnings & Expenses Subscription request can also be sent to "circulation@trustupdates.com" or by calling 800-404-2116. -- 1992-2011 Copyright© A.M. Publishing, Inc., Trust Regulatory News |