Tax Attacks

IRS audits up

A little more than 1 percent of American taxpayers were audited by the Internal Revenue Service (IRS) last year. That might not sound like much, but the figure represents an 11 percent increase over the 2009 total. In the budget year that ended September 2010, 143 million returns were filed, and 1.6 million unlucky individuals got hit with audits by mail or in person.

The IRS didn't choose its victims willy-nilly. It focused on people who reported more than $1 million in income, auditing 8 percent of returns in that category. And while corporate audits were down slightly overall, there was a 7 percent increase in audits of firms with assets of more than $10 million. The IRS has also focused more aggressively on nonprofit organizations in recent years, collecting more data from and seeking more enforcement authority over charities that accept tax-exempt donations.

The intensified effort paid off for the IRS. "We saw individual audits increase, reaching the highest rate in the past decade," Steve Miller, IRS deputy commissioner for services and enforcement, told the Associated Press in December. "The bottom line shows enforcement revenue topped $57 billion, up almost 18 percent from last year."