Individual Audits Reach Highest Rate In a Decade

According to recently released statistics, the IRS (Internal Revenue Service) has been a bit busier in 2010, as audits are up nearly 11% over last year.

Given the fact that the nation is currently posting trillion dollar plus deficits, and given the fact that the nation is scrambling to come up with ways to generate new revenues, this piece of data can hardly come as a surprise.

According to the IRS, the agency audited 1,581,394 individual returns last year, up from 1,425,888 in 2009.

Did the increased audits produce increased revenues? You bet.

The IRS collected $57.6 billion in enforcement revenues in 2010, up from $48.90 billion in 2009. Enforcement revenues have grown dramatically from the $33.8 billion that was collected in 2001.

Here is a quick breakdown of where the $57.6 billion in enforcement revenues came from in 2010:

Collection - $29.1 billion
Examination - $16.9 billion
Appeals - $6.7 billion
Document Matching - $4.9 billion

The increased number of audits required more manpower from the IRS. In total, 22,710 people were employed by the IRS for enforcement purposes in 2010, up from 21,059 in 2009.

Of the 143 million individual tax returns that were filed last year, a little more than 1% (1,581,394 returns to be exact) ended up being audited.

If you made under $200,000 in 2010, then there was a 1.04% chance that you were audited. If you made over $200,000 in 2010, then there was a 3.10% chance that you were audited. If you made over $1 million in 2010, then there was a 8.36% chance that you were audited.

Of the 9,949,946 business returns that were filed in 2010, 58,067 (0.58%) ended up being examined by the IRS. This was down slightly from the 58,144 returns that were examined in 2009.

For "large corporate returns" (corporations with $10 million in assets and higher), 10,207 of a possible 72,076 returns were audited in 2010. This is down from 14.55% in 2009, and down significantly from the 20.00% figure posted in 2005.

If you owned a corporation with $250 million or higher in total assets, then there was a 23.44% chance that your tax return was examined in 2010.

In terms of enforcement actions in 2010, here is the breakdown:

3,606,818 Levies
1,096,376 Liens
605 Seizures

This compares to 3,478,181 levies, 965,618 liens and 581 seizures in 2009.

In 2010, prosecutions recommended 1,511 tax and tax related criminal investigations, up from 1,269 the year before.

69% of those filing individual tax returns in 2010 chose to file online, up from 66% in 2009 and 31% in 2001. 66.9 million people checked on the status of their refund checks on the IRS.gov web site in 2010, up from 54.3 million the year before.

Source: IRS.gov - FY 2010 Enforcement Results

Filed under: General Knowledge