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Saturday, December 26, 2009

IRS Releases 10-Year Enforcement Data: Business Audits Down, Individual Audits Up

The IRS has released its Fiscal Year 2009 Enforcement Results, with ten years worth of data.  Among the trends:

  • Enforcement revenue up 50% from 2000
  • Individual audit rate up 100% from 2000
  • A millionaire is six times more likely to be audited than someone earning less than $200,000
  • Business audit rate down 15% from 2000
  • The only businesses with a higher audit rate in 2009 than 2000 are small businesses (< $10m assets).  The audit rate of larger businesses (including those with over $250m of assets) is lower in 2009 than in 2000

 

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Enforcement $

$33.8b

$33.8b

$34.1b

$37.6b

$43.1b

$47.3b

$48.7b

$59.2b

$56.4b

$48.9b

Audit Rate

 

 

 

 

 

 

 

 

 

 

  Individuals

0.49%

0.58%

0.57%

0.65%

0.77%

0.93%

0.97%

1.03%

1.01%

1.03%

    < $200k

 

 

 

 

 

 

0.93%

0.98%

0.95%

0.96%

    > $200k

 

 

 

 

 

 

2.57%

2.68%

2.94%

2.89%

    > $1m

 

 

 

 

5.03%

6.10%

5.25%

6.84%

5.57%

6.42%

  Businesses

0.69%

0.55%

0.53%

0.49%

0.36%

0.57%

0.60%

0.66%

0.63%

0.58%

    < $10m

0.77%

0.60%

0.63%

0.58%

0.32%

0.79%

0.80%

0.92%

0.95%

0.85%

    $10m-$50m

11.7%

9.7%

7.8%

6.2%

9.4%

12.3%

14.2%

15.0%

11.7%

10.1%

    $50m-$100m

14.7%

12.3%

10.7%

9.8%

12.9%

16.4%

13.8%

11.4%

11.7%

14.3%

    $100m-$250m

17.4%

17.6%

16.0%

12.9%

16.9%

17.5%

14.0%

12.1%

12.8%

13.6%

    >$250m

31.4%

32.1%

34.4%

29.8%

39.8%

44.1%

35.2%

27.2%

27.4%

25.7%

  Exempt Orgs

0.89%

0.61%

0.67%

0.71%

0.67%

0.58%

0.83%

0.87%

0.88%

1.24%

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Comments

You don't have that broken down by Democrats and non-Democrats do you?
How about high-level Democrats vs "little people"?

Posted by: EvilDave | Dec 26, 2009 11:05:47 PM

Of course they're auditing fewer corporations and more small businesses/individuals. The former have teams of lawyers and fiscalists on the payroll, the latter do not. They are more likely to not put up a fight and pay up right away (money to the IRS or the lawyers, it's lost either way -- why add the stress of a court case?).

Posted by: V-Man | Dec 27, 2009 12:30:42 AM

Can anyone explain how for businesses, in every class (and all businesses are included in all the classes as shown in the table) the audit rate is higher than the audit rate for all businesses? That makes no sense to me! The only exception is in 2004, where businesses making less than $10m has a lower audit rate than all businesses. Something's missing here?

Posted by: Bo | Dec 27, 2009 8:48:14 AM

I don't understand how the IRS only audited 0.58% of all business returns if the percentage of businesses in every category was higher than that. I don't think the IRS actually audited 25% of all large corporations... the decimal must be in the wrong spot.

Posted by: John L. McCready, EA CRTP | Dec 30, 2009 7:37:05 PM

I've never had problems with the IRS until this year. They spuriously claimed I owed over $14,000! They garnished my wages and raided my bank without warning (which is supposed to be illegal to do without warning). It took me several months to get it all straightened out, but it turned out they owed me so much more money than I owed them that they sent a letter of apology. Of course, they didn't send me any interest like they tried to charge me.

This is "change" we can believe in?

Posted by: Stephen | Jan 1, 2010 8:41:45 AM

You make they take property tax what do they do for you and your property money you owe money to the irs they,ll take your home your pay etc. in the land of the FREE nothing is free work hard do the right thing buy a beautiful boat for you your wife and children then because you worked hard over a certain length you pay a luxury tax just keep working and keep paying until you die then they tax you to die way to much taking time they should give back to the little people who unfortunatly stuff the pockets might be off base a bit but no matter how you look at it or talk about it its all about the BENJIMENS

Posted by: ed | Jan 2, 2010 10:08:05 AM