What is the probability that the auditor will select an

Question

In a recent year the U.S. Internal Revenue Service (IRS) received 132,275,830 individual tax returns. The actual Rower 0; each type of individual return received by the IRS during, the year is given below:

Type of Return	Total Returns Filed
1040A. Income Under $25,000	31,675,935
Non 1040A, income Under $25,000	20,295,694
Income $25,000-$50,000	30,828,932
Income $50,000-$100,000	26,463,973
Income $100,000 & Over	12,893,802
Schedule C. Receipts Under $25,000	3,376,943
Schedule C, Receipts $25,000-$100,000	3,867,743
Schedule C, Receipts $100,000 & Over	2,288,550
Schedule F. Receipts Under $100,000	318,646
Schedule F, Receipts $100,000 & Over	265,612

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 I040A, 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 this year's 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 & over category.

Answer 1

Consider the following statistics problem and respond properly by applying the appropriate concepts of statistics. In the recent year, the U.S. Internal Revenue Service acquired 132,275,830 individual tax returns. The actual Rower 0; each kind of individual return received via the IRS throughout, the year is provided. Assume that an IRS auditor should arbitrarily choose and analyze an individual return. 1) Determine the probability that the auditor will choose an individual return from the 1040A, Income Under $25,000 category? 2) Find the probability which the chosen return didn’t make use of Schedule C? 3) Find the probability that the chosen return reported income or receipts of $100,000 and over? 4) In year 2006 the IRS analyzed 1% of all individual returns. Supposing the examined returns were uniformly distributed across the 10 categories in the above, explain how many returns from the Non I040A, Income $50,000-$100,000 category were analyzed.