Audit Rate for Returns of Wealthy Americans Dropped Sharply in FY 2008
The Internal Revenue Service's audit rate for wealthy Americans sharply declined in discal year 2008, the Transactional Record Access Clearinghouse said in a new report based on data it said it obtained from the IRS.
More than 300,000 returns showed income of more than $1 million in that year, and IRS figures show a drop in the audit rate of at least 19 percent, TRAC said in its report. An IRS spokesman could not be reached for comment on the report.
The group said pontential IRS accounting errors and conflicting numbers issued by the IRS on March 13 mean "the actual extent of this decline may be much larger."
TRAC asserted that "Given the lag between the year that income is received, a return is filed, and then becomes subject to audit, the drop in the audits occurred for those returns with income earned at the hegith of the real estate boom, just before the economy turned sour."
Drop of 19 Percent or More Seen
According to TRAC, IRS figures indicate that audits of taxpayers reporting a total positive income of $1 million or more - involving both face-to-face audits and agency correspondence contacts - fell to only 5.6 per 100 returns filed in fiscal year 2008, representing a 19 percent drop from FY 2007
TRAC noted that this figure was confirmed by the IRS, but said the agency published on its website a second set of figures showing the audit rates may have dropped more, indicating a rate of 4.4 audits per 100 returns.