For the 2005 fiscal year, just 30 out of the country's more than 180,000 millionaires received a face-to-face audit from the Internal Revenue Service, according to Syracuse University's Transactional Records Access Clearinghouse.
TRAC, which is in the middle of an information access battle with the IRS, said that it had reviewed data from the agency revealing that when only traditional sit-down audits were considered, taxpayers reporting less than $25,000 in income were six times more likely to be audited than all those reporting $200,000 or more in income.
According to a statement from the clearinghouse, the IRS has declined to release statistical data that might explain the aberration. TRAC also took issue with the IRS's history of not further breaking out the various categories of upper-income taxpayers -- stopping at the $200,000-plus category.
Late the same day that TRAC published its report, the clearinghouse released a statement that the IRS had informed the group that its official numbers were not correct. TRAC requested additional information from the IRS and has said it will post a follow-up report if warranted.
The group also suggested that the IRS could increase its number of audits by using correspondence to clear up simple audit issues in advance. While past TRAC reports found that over the last decade only correspondence audits have grown, the clearinghouse also pointed out an IRS footnote saying that an unspecified number of correspondence audits for 2005 had been included in the agency's counts of face-to-face audits.
TRAC also noted that while the IRS has said that corporate audits were up by 69 percent, its analysis of information found that audits for companies with assets of $250,000 or less more than doubled from the previous year, while audits of companies with assets of $250,000 to $1 million increased by 155 percent, and audits of companies with assets of $1 million or more increased by 18 percent.
The full report is available at http://trac.syr.edu/tracirs/latest/current/.
Updated March 29, 2006, 10:48 a.m. EST.
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