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IRS focuses tax audits on high earning individuals. In general, the more you earn, the more likely you are going to experience an audit from the IRS.

US taxpayers earning at least $1 million or more per year were audited by the Internal Revenue Service last year. 1 in 100 individuals earning less than $200,000 had their income tax returns examined, compared to 1 in 8 people earning more than $1,000,000.

The millionaire earners audited last year was 40% higher than those audited in 2010. The IRS is targeting high net worth individuals in an effort to demonstrate that tax laws are applied fairly, as high net worth (HNW) individuals are more economical for the IRS to contact.

The IRS is taking great pains to assure that there’s equity in the taxation system and to assure that those with lower incomes know that those at the higher end of the spectrum are subject to the same rules and enforcement.

The IRS divides income earners into three main categories of income: below $200,000, $200,000 and up, and $1 million and higher.

About 1 in 25 people earning $200,000 and up was audited last year with a much lower number for taxpayers with incomes below the $200,000 level.

The IRS also audited a greater number of large corporations than smaller ones, searching for increased corporate tax revenue.

Last year, only 1 percent of corporations with assets under $10 million were audited while corporations with assets of $250 million and up, had a 28 percent chance of being audited.

The IRS reported its enforcement efforts to collect all taxes owed which includes audits, court cases and other activities, netted $55 billion last year. The IRS is serious about collection and enforcement as there is a huge amount of money they can collect from those who improperly report their taxes.

The IRS audited nearly 1.6 million of the 141 million individual income tax returns that were filed. Last year more than 8 in 10 individuals audited ended up paying additional taxes, so a formal IRS audit does not necessarily mean you will need to pay more taxes.

The Internal Revenue Agency collected a total of $2.3 trillion in revenue last year from individuals and businesses, including the afore mentioned $55 billion from enforcement efforts.

IRS Statistics

  • In 2011, the agency garnisheed wages or seized money from bank accounts 3.7 million times, put liens on property 1 million times and seized 776 pieces of property.
  • 77 percent of individual returns were filed electronically last year, up from 69 percent in 2010.
  • If you are trying to call the IRS be prepared to wait. Only 70 percent of callers to IRS taxpayer information telephone lines got through, which means that if you have questions about an IRS letter you have received, getting a fast answer from the government is not likely.
  • The information IRS officials dispensed over the phone to taxpayers was only accurate 93 percent of the time, meaning that there is nearly a 1 in 10 chance of an agent giving taxpayers incorrect information.
  • The IRS website, was visited 319 million times last year, making it one of the most trafficked government sites.
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