Internal Revenue Service enforcement activities brought in a record $43.1 billion in fiscal 2004, up 15 percent, or $5.5 billion, over 2003, the agency reported.
After years of decline, the IRS audited 9,560 -- or one in six -- of the largest corporations (those with assets of $10 million or more) in fiscal 2004, an increase of more than 2,000 over the previous year.
"Overall, these audit rates, while we've made progress, are still too low," IRS Commissioner Mark Everson said. "We have more work to do."
Audits of taxpayers earning $100,000 or more topped 195,000 -- a 40 percent increase from 2003 and a 74 percent increase from 2002, Everson said. Meanwhile, total audits of all individual taxpayers rose nearly 19 percent over 2003 and topped 1 million for the first time since 1999.
The agency said that the number of levies exceeded 2 million, a 21 percent increase from 2003 and triple the number in 2001.
Everson noted that, based on the agency's overall budget of just over $10 billion, IRS enforcement revenue yielded a four-to-one direct return on every dollar invested in tax administration.
Everson said that the agency needed to improve in its enforcement among small businesses -- those with less than $10 million in assets. Audits of that group dropped to 7,290 from 13,680 last year. He cited several reasons for the decline, including diverting resources to auditing high-income taxpayers and labor-intensive abusive schemes, as well as to the National Research Program.
"As I've noted, we started to bring up the audits of large businesses this year. I expect to do the same for small businesses in 2005," Everson said.
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