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In 2006 the U.S. Internal Revenue Service (IRS) received 132,275,830 individual tax returns (The 2008 New York Times Almanac). The actual number of each type of individual return received by the IRS in 2006 is given below:
Suppose an IRS auditor must randomly select and examine an individual return.a. What is the probability that the auditor will select an individual return from the 1040A, Income Under $25,000 category?b. What is the probability that the selected return did not use Schedule C?c. What is the probability that the selected return reported income or Reciepts of $100,000 & Over?d. In 2006 the IRS examined 1% of all individual returns. Assuming the examined returns were evenly distributed across the ten categories in the above table, how many returns from the Non 1040A, Income $50,000$100,000 category were examined?e. When examining 2006 individual income tax returns, IRS auditors found that individual taxpayers still owed $13,045,221,000 in income taxes due to errors the individual taxpayers had made on their 2006 individual income tax returns (this is referred to by the IRS as recommended individual taxes). Use this information to estimate the recommended additional taxes for the Schedule C, Receipts $100,000 & Overcategory.
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