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IRS: audits increase 20%
Enforcement revenues increase 10 percent in 2005, to a record $47.3 billion.
November 3, 2005: 3:02 PM EST
By Rob Kelley, CNN/Money staff writer
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NEW YORK (CNN/Money) - The IRS announced Thursday that the number of tax-return audits in 2005 increased by over 20 percent, to 1.22 million, the highest number in seven years.

In addition, increased audits led to a 10 percent growth in "enforcement revenues," to $47.3 billion.

IRS Commissioner Mark W. Everson said the better enforcement stemmed from increased efforts to train employees to comply with the 1998 IRS reform act.

"Part of the increases comes from improved procedures and part from a new emphasis on enforcement," he said.

Audits of high-income individuals -- with salaries more than $100,000 -- reached their highest level in 10 years, at 221,000.

Everson said he felt that the coverage in this category was still low compared to his goals, with only 1 in 63 high-income individuals being audited.

After several years of decline, audits of small corporations more than doubled, to almost 18,000.

And audits of corporations with assets of over $10 million increased 14 percent, to nearly 11,000.

Everson also noted that audit rates were still below their mid-1990s highs, but had increased dramatically from just a few years ago.

"We do not have overall audit targets. We have certain priorities -- high-income individuals and corporations who might use tax shelters, for instance," he said. "Our goal is to make sure that fairness resonates throughout the system. The average American needs to know that when they pay, their neighbors and competitors are doing the same."

The agency also reported that levies and liens had recovered to levels last seen in 1998, and that seizures were up slightly from 2004.

The IRS budget for fiscal year 2005 was $10.2 billion, and President Bush has recommended an increase to $10.7 billion for 2006.


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