According to a recent analysis by the Treasury Inspector General For Tax Administration (TIGTA), for federal income tax returns filed in calendar year 2013, “audit coverage” (which I think means the percentage of returns actually audited) was under 2% for incomes in the range of $200,000 to $399,999, and increased with each incremental increase in income, to a high of 12.1% for returns of $5,000,000 and over.
As for the “productivity” of IRS audits (which was the purpose of the analysis), the “recommended dollars per audit hour” (meaning the ratio of the amount of additional tax recommended by the auditors to the number of auditor hours expended) ranged from $605 per audit hour for returns in the $200,000 to $399,999 bracket, to $4,545 per audit hour for returns of $5,000,000 and over, again generally increasing with each incremental increase in income (although not linearly). The TIGTA’s point was that auditing higher-income taxpayers produces more results, that is, more tax assessed per hour expended, so the IRS should concentrate its audit resources on higher-income taxpayers. Makes sense to me. Via TaxProf Blog.
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