IRS Audits Increase, Wealthiest Targeted

WASHINGTON -- The Internal Revenue Service is making it a bit riskier to cheat on your taxes.

The tax agency increased the number of returns it audited by nearly 11 percent this year, statistics released Wednesday show. Wealthy taxpayers and big businesses were most likely to be targeted.

The IRS also stepped up audits of charities and other tax-exempt organizations.

In all, the IRS examined more than 1.58 million individual returns in the budget year that ended in September, up from 1.43 million the year before.

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

Overall, a little more than 1 percent of individual returns were audited, either by mail or in person. The IRS audited more than 8 percent of returns with incomes above $1 million.

Taxpayers filed nearly 143 million returns, including those from individuals and married couples. Nearly 389,000 taxpayers reported incomes of $1 million or above.

Corporate audits dropped slightly, by less than 1 percent. But there was a 7 percent increase in the number of audits of firms with $10 million or more in assets.