IRS audits of millionaires at all-time high of 12.5%

IRS audits of millionaires at all-time high of 12.5%
The U.S. Internal Revenue Service said it audited 12.48% of individual tax returns with income exceeding $1 million during 2011, an all-time high.
JAN 19, 2012
The U.S. Internal Revenue Service said it audited 12.48 percent of individual tax returns with income exceeding $1 million during fiscal 2011, a high reached at a time of debate over the taxation of top earners. The announcement marks the third consecutive year that the IRS increased its audit rate on returns showing income of more than $1 million. According to IRS data, the previous record was the 8.36 percent of returns in that category audited during fiscal 2010. “We've always tried to make sure there was equity in the system,” Steven Miller, deputy IRS commissioner for services and enforcement, said in a telephone interview today. Miller said the higher rate of audits on top earners can be attributed to a greater focus on income held outside the U.S. “We have done a lot of work in the offshore area,” Miller said. The IRS released the data as protesters have occupied parks in dozens of U.S. cities over the past several months to highlight perceived income inequality. Democrats and Republicans in Congress have repeatedly clashed during the past year over the Democrats' proposal to impose a surtax on annual income over $1 million. The audit rate also climbed for corporations with more than $250 million in assets. The IRS said it audited 27.6 percent of these businesses, up from 25.3 percent in fiscal 2010. $55.2 Billion The IRS said it collected $55.2 billion from overall enforcement activities during fiscal 2011. That is down almost 4.2 percent from the $57.6 billion the agency collected from audits the previous year. The audit rate for individuals in all income brackets remained constant at 1.11 percent in 2011 while the rate for small corporations -- those with assets less than $10 million -- rose to 1.02 percent from 0.94 percent in 2010. Miller said the IRS will conduct audits this year with about 3,000 fewer enforcement personnel than in 2010. He said the reduced workforce wouldn't diminish the agency's tax collection efforts. “We'll be fine,” Miller said. “What we're going to try to do is make sure we're going to invest where we need to invest.” --Bloomberg News--

Latest News

Integrated Partners, Kestra welcome multigenerational advisor teams
Integrated Partners, Kestra welcome multigenerational advisor teams

Integrated Partners is adding a mother-son tandem to its network in Missouri as Kestra onboards a father-son advisor duo from UBS.

Trump not planning to fire Powell, market tension eases
Trump not planning to fire Powell, market tension eases

Futures indicate stocks will build on Tuesday's rally.

From stocks and economy to their own finances, consumers are getting gloomier
From stocks and economy to their own finances, consumers are getting gloomier

Cost of living still tops concerns about negative impacts on personal finances

Women share investing strengths, asset preferences in new study
Women share investing strengths, asset preferences in new study

Financial advisors remain vital allies even as DIY investing grows

Trump vows to 'be nice' to China, slash tariffs
Trump vows to 'be nice' to China, slash tariffs

A trade deal would mean significant cut in tariffs but 'it wont be zero'.

SPONSORED Compliance in real time: Technology's expanding role in RIA oversight

RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.

SPONSORED Advisory firms confront crossroads amid historic wealth transfer

As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.