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The IRS's 2009 data book provides some insight on your chances for being audited

The 2009 data book published by the IRS provides valuable information about how many tax returns IRS examines and what categories of returns IRS is focusing its resources on. The report describes activities conducted by the IRS from Oct. 1, 2008, to Sept. 30, 2009.

Access the full report http://www.irs.gov/taxstats/article/0,,id=102174,00.html

INDIVIDUAL TAX RETURNS

1,425,888 of the 138,788,744 total individual income tax returns with a filing requirement were audited. This is roughly 1% which was the same percentage as the previous year.

36 % of the total number of individual income tax returns audited in FY 2009 was of returns with an earned income tax credit (EITC) claim, roughly the same as for FY 2008.

Only 23% of the individual audits were conducted by revenue agents, tax compliance officers, and tax examiners; the bulk of the audits (about 77%) were correspondence audits mailed to taxpayers.

For individuals with a business showing total gross receipts of $100,000 to $200,000, 4.2% of returns were audited in FY 2009, versus 3.8% in FY 2008. For gross receipts of $200,000 or more, 3.2% of returns were audited in FY 2009, versus 3.1% in FY 2008.

For returns showing total positive income of $200,000 to $1 million, 2.3% of returns not showing business activity were audited, and 3.1% of returns showing business activity were audited; for FY 2008, these percentages were 2.6% and 2.8% respectively.

For FY 2009, the audit rate for returns with total positive income of $1 million or more was 6.4%, versus 5.6% in FY 2008.

BUSINESS TAX RETURNS

For all corporate returns other than Form 1120S, 1.3% of the returns were audited, the same percentage as for the year before.

For small corporations with total assets of: $250,000 to $1 million, 1.3%; $1–$5 million, 1.8%; and $5–10 million, 2.7%. For FY 2008, the percentages were, respectively, 1.4%, 2%, and 3.1%.

For large corporations, those with total assets of $10 million or more, the overall audit rate was 14.5%, down from 15.3% for FY 2008.

For partnership and S corporation returns, the audit rate was .4%, the same as for the year before.

OTHER INFORMATION

Math error notices: There were 13.48 million math error notices that IRS sent out relating to the 2008 return. 74.4% of these notices were attributable to the recovery rebate credit.

Penalties: In FY 2009, IRS assessed 26.4 million civil penalties against individual taxpayers totaling almost $15 million dollars. 54.71% of these penalties were for failure to pay, 28.67% for underpayment of estimated tax, and 14.42% for delinquency. On the business side, there were a total of 970,098 civil penalty assessments totaling $1.85 million dollars. 55.8% of these assessments were for either failure to pay or underpayment of estimated tax.

Offers in compromise: In FY 2009 52,000 offers in compromise were received by IRS, and 11,000 (26%) were accepted. These figures reversed declines in the two preceding years.

Criminal cases: IRS initiated 4,121 criminal investigations in FY 2009. There were 2,570 referrals for prosecution and 2,105 convictions. Of those sentenced, 81.2% were incarcerated. In comparison, in FY 2008, IRS initiated 3,749 criminal investigations and there were 2,785 referrals for prosecution. Of those sentenced, 80.9% were incarcerated.

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