IRS Audits Of Millionaires Jump By Roughly A Third In Fiscal 2011
What do the Occupy movement and IRS have in common? They're both taking an interest in the one percent.
Tax audits for millionaires jumped in fiscal 2011 by roughly a third, with the Internal Revenue Service examining income tax returns for 12.48 percent of people who earn $1 million or more, according to Bloomberg. In other words, about one in every eight millionaires got an audit this year. By comparison, in fiscal 2010 the IRS only audited 8.36 percent of millionaires.
A comparison of the audit rates for millionaires and less wealthy taxpayers suggests the IRS is giving special care to the upper tax brackets. While the IRS audited one in eight millionaires in 2011, the same thing happened to just one in 100 people earning less than $200,000, according to the Associated Press.
By paying closer attention to the finances of the well-off, the IRS is putting itself in good company. Critics ranging from billionaire investor Warren Buffett to protesters in the coast-to-coast Occupy movement have said in recent months that U.S. tax law unfairly favors the rich.
At a time when millions of Americans are struggling to make ends meet -- and when the federal government faces revenue shortfalls that could bring about a wave of layoffs next year -- the country's high earners have drawn increasing scorn for paying what critics call comparatively low tax rates.
And such complaints have data backing them up. In 2009, more than 1,400 millionaires paid no federal income taxes at all, according to an August Tax Policy Center report cited by the Los Angeles Times. By 2010, that number had risen to about 4,000, and by 2011 it was up to about 7,000. Then there are the tens of thousands of millionaires who pay taxes at a rate lower than many middle-class households.
Whether increased audits will translate into more criminal investigations is not yet known. But in 2010, the IRS ramped up probes by 14 percent, according to Businessweek.