In terms of probability, which of the following taxpayers would be least likely to be audited by the IRS?
A)Taxpayer owns and operates a check-cashing service.
B)Taxpayer is an employed electrician.
C)Taxpayer just received a $3 million personal injury award as a result of a lawsuit.
D)Taxpayer just won a $1 million slot machine jackpot at a Las Vegas casino.
E)Taxpayer has been audited several times before.

Question

Quizplus · Accepted Answer

Taxpayers who have sources of income that are difficult to track, such as owning a cash-based business (option A) or winning large sums of money through gambling (option D) are more likely to be audited by the IRS. Taxpayers who have received large financial payouts, such as personal injury awards (option C), may also be subject to increased scrutiny by the IRS. Additionally, taxpayers who have been audited before (option E) may be more likely to be audited again. Therefore, of the options provided, the employed electrician (option B) would be least likely to be audited by the IRS.

In Terms of Probability, Which of the Following Taxpayers Would