Tempo of Audits Drops for Wealthy By <http://query.nytimes.com/search/query?ppds=bylL&v1=LYNNLEY%20BROWNING&fdq=19960101&td=sysdate&sort=newest&ac=LYNNLEY%20BROWNING&inline=nyt-per>LYNNLEY BROWNING
March 23, 2009 http://www.nytimes.com/2009/03/23/business/23tax.html?_r=1&sq=tempo%20of%20audits%20drops&st=cse&scp=1&pagewanted=print While the number of wealthy Americans swelled in the last couple of years, they faced less scrutiny from tax authorities, according to a study of government data by outside researchers. The <http://topics.nytimes.com/top/reference/timestopics/organizations/i/internal_revenue_service/index.html?inline=nyt-org>Internal Revenue Service audited only about four of every 100 Americans' returns with income of at least $1 million in the fiscal year ended October 2008, according to the Transactional Records Access Clearinghouse, a research organization affiliated with <http://topics.nytimes.com/top/reference/timestopics/organizations/s/syracuse_university/index.html?inline=nyt-org>Syracuse University. The I.R.S. acknowledged that it had audited a smaller portion of these returns than in years past, but disputed the group's interpretation of the data. The government calculated the audit rate at 5.6 percent among millionaires, compared with 4.4 percent by T.R.A.C. The government estimated that the chance of a millionaire being audited declined last year by 19 percent - significant, but less severe than the 36 percent drop claimed by T.R.A.C. "We essentially audited as many millionaires as in the previous year, but there were more returns," said Terry Lemons, an I.R.S. spokesman. The I.R.S. said it audited just over 23,000 returns of the nearly 340,000 filed by millionaires in 2007. That compares with just over 21,800 returns filed by 398,000 millionaires in 2008. While the number of millionaires was growing, the I.R.S. had to shift its focus last year to processing tax rebate checks related to the first economic <http://topics.nytimes.com/top/reference/timestopics/subjects/u/united_states_economy/economic_stimulus/index.html?inline=nyt-classifier>stimulus package, from the Bush administration last summer. Mr. Lemons added that wealthy Americans with at least $10 million in income still stood the highest chance of any income group of being audited - about 10 percent. T.R.A.C., which has a long-running dispute with the I.R.S. over how to interpret data, said an agency official told it on Friday that audit rates for previous years had been misreported, leading to a discrepancy between the two organizations on the size of the decline for audits of millionaires. Because it takes years to conduct audits, scrutiny last year almost certainly involved those tax returns filed while the economy was still booming, before the subprime <http://topics.nytimes.com/your-money/loans/mortgages/index.html?inline=nyt-classifier>mortgage collapse, stock market plunge and federal bailout of the financial system. "Given the lag between the year that income is received, a return is filed, and then becomes subject to audit, the drop in the audits occurred for those returns with income earned at the height of the real estate boom, just before the economy turned sour," the T.R.A.C. report said. The income of the 400 wealthiest Americans swelled in 2006, to an average of $263 million, according to I.R.S. data. Since 1996, this group's share of the nation's total wealth has nearly doubled to more than 22 percent. --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to Mark Crispin Miller's "News From Underground" newsgroup. To unsubscribe, send a blank email to newsfromunderground-unsubscr...@googlegroups.com OR go to http://groups.google.com/group/newsfromunderground and click on the "Unsubscribe or change membership" link in the yellow bar at the top of the page, then click the "Unsubscribe" button on the next page. For more News From Underground, visit http://markcrispinmiller.com -~----------~----~----~----~------~----~------~--~---
