Last week the IRS announced performance statistics for fiscal year 2011, which ran from October 1, 2010 through September 30, 2011. The IRS collected $55.2 million from enforcement actions during that period. IRS enforcement actions include audits, assessments, collection actions, appeals, and litigation.
The IRS also reported that the number of million dollar earners subject to audit increased for the third straight year. Among those making more than $1 million, 1 in 8 faced an IRS audit during fiscal year 2011. “We are looking more at taxpayers at these income levels because we find more issues there,” said IRS Deputy Commissioner Steve Miller.
The same might be said for the IRS’s approach to large corporations. Corporations with assets in excess of $250 million also saw an increase in audit activity. The audit rate for those business climbed to 27.6%. Closely held corporations, specifically those electing under subchapter S of the Internal Revenue Code, also saw an increase in audit activity of 13% over 2010.
The impact of an IRS audit remains severe. More than 80% of of those audited by the Internal Revenue Service paid additional taxes according to the most recent information available.