New statistics released by the Internal Revenue Service showed that the number and percentage of taxpayers earning over $200,000 a year who owed no U.S. income taxes nearly doubled from 2007 to 2008.
The statistics, released Tuesday in the IRS’s Statistics of Income Bulletin, showed that in 2008, there were 4,375,660 individual income tax returns reporting an adjusted gross income of $200,000 or more, and 4,416,986 returns, with expanded income of $200,000 or more.
“Expanded income” includes tax-exempt interest, nontaxable Social Security benefits, the foreign-earned income exclusion, and long-term capital gains.
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“These returns represented 3.072 percent and 3.101 percent, respectively, of all returns for 2008,” said an article in the SOI Bulletin by IRS economist Justin Bryan.
In 2008, there were about 180 fewer returns that showed AGI greater than $200,000 compared to 2007.
For 2008, of the 4,375,660 income tax returns with AGI of $200,000 or more, 18,783 (0.429 percent) showed no U.S. income tax liability; and 10,824 (0.247 percent) showed no worldwide income tax liability, the study found. For 2007, of the 4,535,623 returns with AGI of $200,000 or more, 10,465 returns (0.231 percent) had no U.S. income tax liability, and 4,841 returns (0.107 percent) had no worldwide income tax liability.
The 0.429 percent of high-income people who owed no U.S. income tax liability was the biggest percentage of non-payers going back to 1977, Bloomberg.com noted. In addition, the study showed that the percentage of non-payers nearly doubled in 2008 from 2007.
3 Comments
Click the link in the 2nd graf and read the Bulletin itself for the reasons. The 50-pager starts: "The Tax Reform Act of 1976 requires annual publication of data on individual income tax returns reporting income of $200,000 or more, including the number of such returns reporting no income tax liability and the importance of various tax provisions in making these returns nontaxable.1 This article presents detailed data for the almost 4.4 million high-income returns for 2008, as well as summary data for the period 1977 to 2007. Detailed data for the years 1974 through 2007 have been published previously (see Reference section for more details)."
Posted by: EnrolledAgent | June 16, 2011 10:27 AM
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A perspective - 99.571 percent of the 4.375MILLION "wealthy" taxpayers PAID TAXES. This is versus the 50% of income earners who paid NO income taxes. That is 70.5 million households. (4.375million / .03101 * 50% if you need help). So, a final perspective for those so concerned about the "18,000" headline -- they represent 1.3 one-hundredths percent of all households (.000133). I am not really worried about them -- I am concerned with the number of people in that lower 50% who are cheating -- if even 10% are withholding reporting 25% of their real income (Schedule C - tips - cash wages for example which I contend to be a significant share of the over one TRILLION dollars of unreported income (the euphamistically entitled 'tax gap') that is a VERY SIGNIFICANT amount to consider.
Posted by: CANDJE | June 16, 2011 9:30 AM
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Why does not the IRS reveal the reason why these taxpayers did not pay any income taxes? Did they cheat or did they just take advantage of the Income Tax Laws that Congress passed and the sitting President signed into law? What is the IRS main reason on these?
Posted by: Linor34b | June 16, 2011 8:41 AM
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