Crack Down?

These drives are less a crack down and more like higher efficiencies made by the IRS. With the coming age of information technology and the prevalence of updating and amending tax regulations over the years, it seems like the IRS is more able to analyze returns. Which unfortunately translates into taxpayers should be on the ball to report their income. It’s tough. The IRS is like a business. With technology and efficient procedures, they get better. As individuals and businesses, we too have to step up our abilities in reporting both being on time and being accurate.

• Audits of individuals with income of $1,000,000 and higher increased to 17,015 from 12,835, a nearly 33% increase in just one year. About 1 in every 16 of these taxpayers faced audits last year. If you’re earning that kind of money and they notice a problem, you’re going to hear from the IRS.
• Audits of individuals with incomes over $100,000 surpassed 257,000, an 18% increase from 2005. That’s the highest figure in more than a decade, and well over double the 92,000 completed in fiscal year 2001.
• Audits of S corporation returns increased to 13,984 from 10,417, a 34% increase. This is the highest level since 2000.
• For partnerships, audits of these flow-through returns increased to 9,777 from 8,489, a 15% increase. This category is at the highest level since 1998.
• Audits of small businesses organized as corporations remained about the same. 17,871 audits were completed in 2006, up slightly from 17,858 in 2005.Both of these figures are more than double the 7,294 audits of small businesses in 2004.
• Audits of larger corporations (those with assets over $10 million) dipped by 2.2%, to 10,591 from 10,829 in 2005.While down slightly this year, audits remain up nearly 50 percent from 2003.

This entry was posted on Tuesday, January 9th, 2007 at 2:00 pm.