IRS Planning More Audits of Wealthy, Cross Your T's and Dot Your I's | AccountingWEB

IRS Planning More Audits of Wealthy, Cross Your T's and Dot Your I's

The IRS is beefing up its audit efforts, devoting $393 million of new funding and 5,000 new auditors, tax collectors, criminal investigators and other staff who will focus most of their attention on taxpayers whose adjusted gross income exceeds $100,000.

They will also be looking more closely at corporations and tax evaders. The IRS issued data Thursday that showed 1 in 94 filers, 24 percent more than last year, with AGIs of $100,000 or more were audited in 1993, CNN/Money reported. The number of audits drops to 1 in 164 filers for those with AGIs under $100,000.

For taxpayers in general, 1 in 154 taxpayers were audited, which is 14.2 percent more than the year before.

While most taxpayers envision the IRS auditor knocking on their door, in fact most of the additional audits will be the less invasive correspondence-type audits, which are conducted by mail.

IRS Commissioner Mark Everson announced a renewed emphasis on audits and enforcement, telling reporters that the decline in audits during the 1990s had a "negative effect" on the public paying taxes, CNN/Money reported.

"We need to do more and continue to increase it, particularly on the big income area," said Everson. "But I don't think it's necessarily the case that audits need to return to rates of 10 or more years ago."

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