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Archive for Monday, March 23, 2009

IRS doing fewer audits of wealthy

March 23, 2009

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— The Internal Revenue Service is not living up to its pledge to crack down on wealthy tax cheats, an IRS watchdog group says, citing a drop in audits of millionaires last year.

The tax agency disputes the conclusion, ascribing the “slight” decline in audits to its focus on getting people their economic stimulus checks.

Those with incomes of $1 million and above had a 5.6 percent chance of getting audited in fiscal year 2008, which ended last September, down from 6.8 percent the previous year, according to IRS figures. The actual number of millionaires audited fell from 23,200 to 21,874; the number of millionaires filing tax returns grew from 339,138 to 392,776.

“In the face of growing federal deficits and public calls to lower the tax gap — the amount of taxes due but not reported and paid — the drop in millionaire audits is surprising,” said the Syracuse University-based Transactional Records Access Clearinghouse in a report today.

But IRS spokesman Terry Lemons said that what they regarded as a “slight” drop in audits reflected a year in which the agency was dealing with budget constraints and assuring that economic stimulus checks reached taxpayers.

The audit rate for those earning less than $200,000 was largely unchanged, at slightly less than 1 percent. For those with incomes of more than $200,000, the rate inched up from 2.87 percent to 2.94 percent.

The bottom line, said Lemons, is that “if you are a millionaire you are a lot more likely to be hearing from the IRS.” He also pointed out that a person with an income of more than $10 million now has almost a one-in-10 chance of being audited.

The TRAC report said focus on high earner returns is critical because of the huge rewards. Among those millionaire audit cases where additional taxes were recommended, the average was $198,000 after face-to-face audits and $137,000 for audits done through correspondence.

In total, the IRS collected $56.4 billion in enforcement revenues last year, down from $59.2 billion in 2007 and the first decline in collections in a decade. But the figure was up from $48.7 billion in 2006 and $33.8 billion in 2000.

Comments

SettingTheRecordStraight 5 years, 9 months ago

Scrap the IRS along with federal income taxes and switch to a national sales tax that would do less to punish productivity and achievement.

Flap Doodle 5 years, 9 months ago

Heck, Barry wouldn't have a Cabinet at all if the IRS was doing its job.

Chris Ogle 5 years, 9 months ago

hell, those Millionaires are probably unemployeed, and looking for a job, like the rest of us... See.... told u so..... they are just like us.... except they have more bathrooms to keep clean.

Kryptenx 5 years, 9 months ago

Yes Liberty, that's a great idea. How do you expect to send your children to school? Who will you call when your door gets kicked in by a crazed ninja hell bent on kidnapping and then mutilating your dear kitten?

elfth 5 years, 9 months ago

Why should we do more audits of the wealthy? The gangster Willy Sutton, when asked why he robbed banks, said "because thats where the money is".

just_another_bozo_on_this_bus 5 years, 9 months ago

"How do you expect to send your children to school?"

Through the "magic of the free market" and government by lawsuit.

Alia Ahmed 5 years, 9 months ago

Liberty_One (Anonymous) says…

Better yet, scrap the income tax and replace it with nothing

Anarchist, Liberty_One?

just_another_bozo_on_this_bus 5 years, 9 months ago

I have no doubt that government expenditures could be cut by 40% or more, LO. But the quasi-official Republican policy of the last 25 years or so has been to make it as inefficient and as ineffective as possible (NO in the aftermath of Katrina is an indication of just how successful they have been.) Their goal is to discredit any spending on a social safety net so that all of that money can be diverted to corporate welfare instead.

"And regarding paying for school, having experienced the difference between public and private schools, I will work three jobs if I have to, but I will never allow my children to go to a public school."

Blanket statements like this can be emotionally satisfying, but rarely hold up under scrutiny. There are good and bad schools of either variety, but there is absolutely no evidence that scrapping public schools will result in better education for the majority of people. It certainly wouldn't save any money, unless you plan to pay teachers even less than they currently get (which is one thing private schools often already do.)

SettingTheRecordStraight 5 years, 9 months ago

bozo,

What is "corporate welfare"? I'd seriously like to know because I'm not familiar with any WIC vouchers being sent to our nation's largest job-providers.

If what you really mean is that you oppose tax relief for those who bear the brunt of the government's tax policy, just say so.

georgeofwesternkansas 5 years, 9 months ago

The words "corporate welfare" are nothing more than class warfare from the democrat party. Rather than "corporate welfare" why not "jobs program".

webmocker 5 years, 9 months ago

"I could teach my child more in 1 our then she will learn..."

Ouch. Ouch.

"Our schools system..."

Arguably, ouch.

"My educational experience involved learning the days lesson..."

Ouch.

“They never did and turned to insulting everyone more intellegent.”

Ouch!

Godot 5 years, 9 months ago

As credit markets froze, banks loaned $41 billion to directors and executives.

Hat tip to Feeble. No quotee, no linkee. If you care to learn more, do your own research.

Godot 5 years, 9 months ago

Corporate welfare is the polite term; it is corporate grand larceny when it comes to the big banks, most investment houses, nealy all hedge funds and some insurance companies.

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