TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

A Member of the Law Professor Blogs Network

Tuesday, March 28, 2006

TRAC Reports Higher Audit Rates for Lower Income Taxpayers

Tracirs_2The Transactional Records Access Clearinghouse (TRAC) of Syracuse University reports  today that only 30 of the nation's 180,000 plus millionaires were subject to face-to-face audits in FY 2005. When only traditional face-to-face audits are considered, those reporting less than $25,000 in total positive income were six times more likely to be audited than all those reporting $200,000 or more in income. IRS continues to withhold from TRAC statistical data it has made public in the past that might explain the aberration.

Trac

UpdateFrom TRAC

After this report was posted this morning (3/28/2006), the IRS contacted TRAC and informed us that the official IRS numbers were not correct. In an effort to understand the reasons for this error, TRAC has requested additional information from the IRS. A follow up report will be posted if it is warranted.

http://taxprof.typepad.com/taxprof_blog/2006/03/trac_reports_hi.html

IRS News, Think Tank Reports | Permalink

TrackBack URL for this entry:

http://www.typepad.com/services/trackback/6a00d8341c4eab53ef00d83425b86453ef

Listed below are links to weblogs that reference TRAC Reports Higher Audit Rates for Lower Income Taxpayers:

» Our Tax System: Higher Audit Rates for Lower Income Taxpayers from Zmetro.com
Paul Caron:The Transactional Records Access Clearinghouse (TRAC) of Syracuse University reports today that only 30 of the nation's 180,000 plus millionaires were subject to face-to-face audits in FY 2005. When only traditional face-to-face audits... [Read More]

Tracked on Mar 28, 2006 4:17:26 PM

Comments

Relatively high audit rates for lower income tax payers are no secret, nor is their source. As noted at IRS website in the 2005 Data Book (Pub 55B, March 2006), there were 1,215,308 individual income tax returns were audited during fiscal year 2005, out of 130.6 million returns. Of those, 521,872 (42.9%) were selected on the basis of an earned income tax credit (EITC) claim, which accounts for the high audit rate of returns with under $25,000 of total positive income.

Posted by: ohwilleke | Mar 29, 2006 7:44:11 AM