NEW YORK (CNN/Money) -
The IRS conducted audits last year on less than 1 percent of individual taxpayers -- 1 in 174 to be exact, or 743,000 total. But your odds of being audited in 2002 were greater if you made over $100,000.
In fact, according to a recent IRS compliance report, 1 in every 116 taxpayers (or 0.86 percent) with incomes of $100,000 or more were examined under Uncle Sam's microscope. IRS agents audited only 1 in 185 taxpayers (or 0.54 percent) who made less than $100,000.
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What's more, high earners who were audited were more likely to undergo a field audit -- which takes place at your home or business -- than audited taxpayers who made less than $100,000. The lower earners were more likely to be subject to a correspondence audit, which is an audit by mail and is generally much less intensive than a field audit.
The IRS also contacted 3.4 million taxpayers for underreporting income or for not filing. That's a 36 percent jump over the number of taxpayers contacted for similar reasons in 2001. To ferret out those who underreport or fail to report their income, the IRS cross-checks an individual's wages, interest and investment income with documentation received by that person's employer and financial institutions.
In addition, Uncle Sam contacted 8.3 million taxpayers last year to notify them of math errors on their returns. (For a look at the 10 biggest tax blunders people make, click here.)
Big bucks for Uncle Sam
As a result of the IRS's compliance efforts pertaining both to individuals and corporations, Uncle Sam collected over $32 billion in 2002, the highest level in eight years and a $371 million increase over 2001.
Future compliance efforts will focus on several areas, according to the IRS, including promotion of abusive tax schemes; the use of offshore accounts to hide or improperly reduce income; the underreporting of income and non-filing by high-income individuals; and abuse of the Earned Income Tax Credit.
"The IRS is committed to ensuring everyone pays a fair share, including those who have the resources to move money offshore or engage in abusive schemes or shelters. Honest taxpayers should not bear the burden for others who skirt their responsibility," said IRS Commissioner Bob Wenzel in a statement.
The IRS doesn't reveal the formula it uses to select a taxpayer for audit, but what is known is that each return gets a computer-generated score to measure audit potential. (To learn more about this score and tips on how to avoid an audit, click here.)
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