The IRS brought in a record $43.1 billion in enforcement revenue in fiscal 2004. That’s an increase of $5.5 billion from the year before.
Audits of high-income taxpayers, those earning $100,000 or more, topped $195,000 in 2004. That’s a 40 percent increase from 2003 and a 74 percent increase from 2002.
Total audits of all individual taxpayers topped 1 million for the first time since 1999. In 2004, we saw a nearly 19 percent increase from 2003 and almost a 36 percent jump from 2002.
After years of decline, audits of the largest businesses, those corporations with assets of $10 million and over, climbed to 9,560. That’s up from a low of 7,125 in 2003. One in six large corporations were audited in fiscal 2004.
The number of levies issued — a key enforcement tool — topped 2 million, a 21 percent increase from 2003 and triple the number in 2001.
Criminal investigation activity increased in several areas, including more than 3,000 recommended prosecutions, a nearly 20 percent jump.
Quotes from IRS Commissioner Mark W. Everson
“We started to bring up the audits of large businesses this year. I expect to do the same for small businesses in 2005.”
“Overall, these audit rates, while we’ve made progress, are still too low. We have more work to do. A vigorous enforcement program is important. The great majority of Americans pay their fair share of taxes. Americans deserve to feel confident that when they pay their taxes, neighbors and competitors are doing the same.”
Source: Internal Revenue Service
This article was written by David L. Perkins, Jr., a Vercor partner, and it originally appeared in The Business Owner (www.TheBusinessOwner.com), the periodical of choice for owners of small and mid-size private businesses. All rights reserved, D. L. Perkins, LLC. Copyright 2005.
