|
The
Internal Revenue Service is tightening enforcement. The
IRS audits brought in a record amount of revenue, $23.5
billion in fiscal 2007, up from $17.2 billion the year
before. This suggests that IRS' efforts to update its
return selection formulas are paying off, and agents
aren't doing as many no-change audits.
In fiscal
2007, the IRS audited 1.03% of all personal income
returns, or one out of every 97 returns, up a tad from
the 0.98% exam rate in 2006. Still, the last time the
rate topped 1% was in 1997, when it was 1.28%.
Taxpayers making $1 million or more saw the highest
increase in audits, 9.25% in 2007, up from 6.3% the
previous year. For taxpayers with incomes over $100,000
but less than $1 million, the examination rate was
1.77%, up from 1.67% in 2006. And the audit rate for
taxpayers with incomes below $100,000 was 0.93%, a small
increase from 0.89% the previous year.
Small
businesses felt a little more audit pressure in 2007, as
well. S Corps exams increased to 0.45% in 2007, up
from 0.38% the previous year. For partnerships, 0.42%
of returns were audited, compared with 0.36% in 2006.
The audit rate for small corporations increased to 0.92%
from 0.80%.
For
more information on significant changes in the way the
IRS targets businesses for tax audits, and how it
conducts them
click
here.
Proper recordkeeping is your best defense in the event
your return is selected for audit:
|
