Tax Stats: July 2012

Our monthly collection of statistics from the world of tax

Our eighth tax stat for July shows taxpayer debt outpacing IRS collection efforts.

The total unpaid tax owed to the U.S. Treasury is approaching $400 billion. Balances continue to grow as debt outpaces IRS collection efforts.

Source: Beyond415; IRS Data Books, 2006-2011; TIGTA Report on IRS Compliance Trends 2011

The IRS reports that refund- and employment-related tax identity theft is up more than 57 percent in the first two quarters of 2012, compared to the same time last year. Since the formation of the IRS Identity Protection Specialized Unit in 2008, the amount of tax identity theft reported has grown steadily each year.

With more than 4,400 tax law changes made in the past 10 years, the size of the Tax Code is now almost double the size of War and Peace, Shakespeare's plays and The Bible -- combined.

Source: Beyond415; IRS;;;

From 1998 to 2011, the number of penalties assessed by the IRS increased by 155 percent. In 2011, the IRS assessed more than 38.6 million penalties, totaling more than $30.9 billion -- though it subsequently abated 36 percent of those penalties.

Source: Beyond415; IRS Filing Season Statistics as of June 8; Senate Report 112-77

The IRS reports that it costs $3.66 to process a paper return, and only $0.17 to process an e-filed return. As of June 8, 2012, the IRS received more than 113 million e-filed returns for 2011 -- 82 percent of all Forms 1040 filed -- which cost $19 million to process. The paper returns filed for 2011 cost the IRS more than $88 million. Plus, the error rate for paper-filed returns is 21 percent, compared to e-filed returns with an error rate of 0.5 percent.

Source: Beyond415; IRS Filing Season Statistics as of June 8; Senate Report 112-77

Overall, the IRS audits 1.11% of all 1040s filed -- but it's much more likely to audit taxpayers with no income or with high income.

Source: Beyond415, 2011 IRS Data Book

In 2011, taxpayers and their representatives appealed 148,327 disputes to the IRS Office of Appeals. Nearly half -- almost 70,000 cases -- involved collection issues.

Source: Beyond415, 2011 IRS Data Book

Employment tax audits may not happen often -- but when they do, they can be very costly.

Source: Beyond415

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