WASHINGTON (AP) – The IRS increased its audits of wealthy taxpayers this year, helping the agency haul in a record $43 billion in unpaid taxes.
The tax collectors released the audit statistics with a prod at lawmakers to give the agency an extra $500 million the president requested for expanding efforts to track down tax evaders.
“What you have here is a pure budget squeeze,” said IRS Commissioner Mark Everson. “We’re the only part of the government that can help address the deficit by bringing in revenues.”
He noted the $43 billion collected is more than four times the agency’s $10.2 billion budget.
The IRS this year audited 40 percent more high-income taxpayers – those who made $100,000 or more – compared with last year. Those with lower incomes saw audits increase 15 percent.
Nevertheless, the odds of an IRS audit remain low. The IRS overall looked at about 1 in 129 returns filed by individuals, including about 1 in 68 returns filed by wealthy taxpayers. The audit rate still lags audits of the mid-1990s, when the agency looked at about 1 in 60 individual returns.
“I see the numbers continuing to recover, assuming we get adequate funding,” Everson said.
Audits of small businesses dropped by almost half as the IRS diverted money and employees to wealthier taxpayers and intensive examinations of abusive shelters. The IRS has also been finishing a national study to measure tax evasion.
Audits of the nation’s larger corporations climbed, with about 1 in 6 of the companies examined this year. About 40 percent of the most massive corporations, those with assets of $250 million or more, were audited.
“Overall, these audit rates, while we’ve made progress, are still too low,” Everson said. “We have more work to do.”
Many of the additional individual audits were conducted by mail, a tool used for simpler cases than need less time to resolve. The IRS conducted more traditional face-to-face audits of high-income taxpayers, while lower income taxpayers saw those audits drop.
The IRS said face-to-face audits of high-income taxpayers yielded an average $27,600 tax collection. The more efficient mail audits netted an average collection of $15,110.
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