IRS Goes Banoodles on High Net Worth Taxpayers

Worth noting is the tremendous rise in audits on those earning between 5 and 10 million a year and the even greater jump in audits for those earning over $10 million…

From Bloomberg News via Investment News:

The Internal Revenue Service in 2011 audited 29.93 percent of taxpayers who reported more than $10 million of income, according to statistics released today.

That’s up from an audit rate of 18.38 percent in 2010 and 10.60 in 2009. Overall, the agency’s rate of audits for individual taxpayers stayed constant at 1.11 percent.

The statistics cover audits conducted in fiscal year 2011, which generally corresponds to tax returns filed during 2010.

For U.S. taxpayers with adjusted gross incomes between $5 million and $10 million, the audit rate rose to 20.75 percent from 11.55 percent. People making between $200,000 and $500,000 were audited at a 2.66 percent rate.

Anecdotally I’ve been hearing about a lot more audits from HNW people I speak with and do business with as well.  Nice to have some numbers to put with the stories.

Source:

IRS on a rampage as nearly one in three HNW individuals audited (Investment News)