Posted on July 06, 2005 at 16:51:38:
Audit rates are on the way up. The rate for individuals rose 18 percent last year, and that for high-income individuals—those with income over $100,000—went up 40 percent.
But that’s still not a lot of audits. Only 0.77 percent of personal returns were audited in fiscal 2004—just one in 130. Of the high-income set, 1.47 percent were audited last year, or one in 68. Back in 1966, one in 31 high-incomers were audited!
One change next year: The IRS has determined it will zero in on returns with greater potential, so only taxpayers with incomes over $200,000 will feel the high-income testing.
Corporate audit rates went up, too, to 40 percent for the largest firms with $250 million or more in assets. Even the $10 million companies are getting greater scrutiny, with 17 percent audited. Also being followed closely: tax-exempt groups that didn’t file returns for 2003.