Report Shows Wealthiest Americans Seeing More Tax Audits

by InvestorPlace Staff | January 9, 2012 9:31 am

Last week, the IRS said in an enforcement report[1] that it audited 12.5% of millionaires in fiscal 2011 — up from 8% in 2010 and 6% in 2009. What’s more, about 4% of those earning $200,000 and up were audited, up from 3% the previous year.

There’s not much to worry about if you’re making less than $200,000. As it turns out,  only 1% of taxpayers making less than $200,000  have been audited over the past five years. But, again, if you’re seeing any more than that, prepare to see more IRS agents at your doorstep.

Businesses with big pockets are also getting “special treatment” from the government. Those with $250 million in assets have a 27.6% audit rate  — this is in stark contrast to the 1% audit rate of firms with under $10 million in assets.

Just to put things in perspective, of the 141 million individual returns filed in 2011, 1.56 million audits were performed, according to the IRS. Only about a quarter of those required tax officials to visit the taxpayer in-person.

All of this huffing and puffing resulted in taxpayers shelling out an additional $55.2 billion last year. In addition, the IRS used property liens 1 million times and seized 776 pieces of property.

I wonder what the Occupy movement[2] has to say about this.

The full report from the LA Times can be found here[3].

Endnotes:
  1. an enforcement report: http://www.irs.gov/pub/newsroom/fy_2011_enforcement_results_table.pdf
  2. Occupy movement: http://investorplace.com/2011/10/9-ways-occupy-wall-street-completely-misses-the-point/
  3. here: http://www.latimes.com/business/money/la-fi-mo-irs-millionaire-audits-20120106,0,16218.story

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