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Tax Stats: August 2012

Our monthly collection of statistics from the world of tax

Our final tax stat for August tracks the near-doubling of the number of accounts in IRS Collection in the last decade.

The amount of taxes owed to the U.S. Treasury is more than $350 billion. At the end of 2011, there were more than 10.8 million taxpayer accounts in IRS Collection -- almost double the number of accounts since 2002. The average account owes $10,756 to the IRS.

Source: Beyond415; IRS Data Books

In 2010, the amount of adoption credits claimed jumped 353 percent. The spike in 2010 resulted from the credit becoming refundable, and the minimum credit amount increasing to $13,170 per adopted child. Of the 101,627 taxpayers claiming the credit, 43,295, or almost 43 percent, of those returns were referred for audit.

Source: Beyond415; TIGTA Report

All tax preparers must be registered with the IRS Return Preparer Office and obtain a PTIN. Currently, the number of unlicensed Registered Tax Return Preparers outnumbers the combined total number of CPAs, attorneys and Enrolled Agents. However, as of June 4, 2012, only 1 percent of RTRPs had passed the competency exam required to prepare returns after Dec. 31, 2013. CPAs, EAs and tax attorneys are exempt from the exam requirements.

Source: Beyond415; IRS Return Preparer Office

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The number of S corporations has increased 80 percent from 1997 to 2011, with more than double the number of returns filed by traditional Subchapter S corps. The IRS estimates a 27 percent increase in the number of S corp filings by 2015.

Source: Beyond415; TIGTA Report

For tax year 2010, 19 percent of tax returns filed claimed the Earned Income Tax Credit. The average credit amount was $2,240 per return. After adjusting for inflation, the average EITC claim paid in 2010 was 8 percent higher than in 2005.

Source: Beyond415; IRS Statistics of Income; Bureau of Labor Statistics

IRS budget increases do not necessarily translate into more IRS agents. In fact, the IRS budget has almost doubled in the past 20 years, but the number of IRS personnel has shrunk by 20 percent. This is largely due to increases in e-filing and better information systems to perform processing and compliance functions.

Source: Beyond415; IRS Data Books

If your client is selected for an IRS examination, there is a good chance that the audit will result in an additional balance owed. The likelihood of a no-change audit depends on the type of return, but on average, a mail audit is much more likely to result in no proposed changes than a field audit.

Source: Beyond415; IRS Data Book, 2011

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