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Scared Straight

The IRS is threatening to conduct more audits. Should you be worried?

This story appears in the July 2005 issue of Entrepreneur. Subscribe »

Resisting any moves toward tax hikes, the Bush administration wants the IRS to step up enforcement, presumably to help offset the ballooning budget deficit. That could mean more audits for individuals and businesses, a daunting prospect for busy entrepreneurs.

In February, the administration asked Congress for an extra $500 million for the IRS, raising the agency's enforcement budget to $6.89 billion--a 7.8 percent increase over last year's budget. Many observers, however, dismiss the increased funding as simple saber rattling.

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