IRS audits swelled Uncle Sam's coffers by $57 billion last year, largely by targeting the rich. Lesson learned? If you possibly can, try to keep your 2010 reportable income less than $1 million.
If you’re rich or non-profit, your odds of being audited last year went up.
For the budget year ending Sept. 30, 2010, the IRS audited 1.58 million individual returns, up 11 percent from the 1.43 million audits the previous year. And they made money doing it…
“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.”
Among the returns most likely to be audited? Wealthy individuals, big businesses, and non-profit organizations.
As we reported in our story last year, What Are Your Odds of an IRS Audit?, targeting people with money is nothing new. Here are the statistics from the previous year:
- If you made over $200,000, your odds of an audit were about 1 percent.
- Incomes over $200,000 but less than $1 million had audit odds of nearly 3 percent.
- With an income over $1 million, your odds of an audit increased to nearly 6.5 percent.
For tax year 2009, about 389,000 individual returns had income of $1 million or above, and IRS audited more than 8 percent of them.
My advice? Make it a goal to report less than a million in income for 2010. If you can’t help it because you’re just that good, keep accurate records.