Tax Stats: November 2012

Our monthly collection of statistics from the world of tax, from Beyond415

Our last tax stat for November shows that the IRS knows that the main way the rich are different from you and me really is that they have more money.

Statistically, audit change rates for taxpayers who make more than $1 million in income are lower than rates for taxpayers who make less than $1 million. However, the IRS is 11 times more likely to select high-income taxpayers for audit. For high-income individuals, the IRS averages $141,323 in additional taxes for each return examined. For taxpayers making less than $1 million, the IRS averages only $6,219 in additional taxes for each return examined.

Source: Beyond415; IRS Data Book, Table 9, 2011

Historically, as expected, IRS audits rarely result in a refund due to the taxpayer. In 2011, only 4.2 percent of individual tax return (Form 1040) audits resulted in refunds (66,381 out of 1,564,690 returns). The average refund in these audits was $16,198.

Source: Beyond415; IRS Data Books, 1995-2011

The IRS conducts almost 70 percent of all audits by mail. However, certain taxpayer types are predominantly examined by a person -- an IRS revenue agent. IRS revenue agents more often examine high-income, business and specialty tax taxpayers.

Source: Beyond415; IRS Data Book 2011, Table 9

Surprisingly, almost 80 percent of all audits are conducted on individuals whose income is less than $200,000. Overall, individual taxpayers experience almost 91 percent of all audits conducted by the IRS.

Source: Beyond415; IRS Data Book 2011, Table 9

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