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Tuesday, March 28, 2006

LATEST IRS AUDIT DATA

The IRS recently released its audit data for 1995. Some of the interesting statistics for income taxes include:
  • 0.93% of all individual returns that were filed were audited. This was a 21% increase over the prior year.
  • The audit rates for corporate returns are up, too. The audit rate for returns other than Form 1120S jumped by 75%, to 1.24% from the .71% rate for 2004. The audit rate for S corporations jumped by 58%, to .30% from .19% for the year before. The audit rate for large corporations ($10 million and over) was 20.02% versus 16.74% for the year before.
  • The IRS assessed 7.455 million civil penalties against individual taxpayers. Of these, 4.420 million (59.3%) were for failure to pay, followed by 2.454 million (32.9%) for underpayment of estimated tax. On the corporation side, there were a total of 280,498 penalty assessments, 85.3% for either failure to pay or underpayment of estimated tax.
  • 74,000 offers in compromise were received by IRS, and 19,000 (25.6%) were accepted.
  • IRS initiated 4,269 criminal investigation in fiscal 2005. There were 2,859 referrals for prosecution and 2,151 convictions. Of those sentenced, 83% were incarcerated.

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