Last night I sat down with a captivating page-turner that I just had to finish before I went to bed. No, not The Hunger Games. It was The Internal Revenue Service Data Book, 2011 – 84 pages chock-full of tables and footnotes. It addresses 2010 tax returns and the 2011 IRS fiscal year (“FY”). It was just published. I think I secured a first edition .pdf download. Trust me; there is some very interesting information in this book.
- The IRS had 91,380 employees at the end of its FY 2011, down from 94,346 at the end of its FY 2010.
- 77% of 143 million individual returns were filed electronically.
- What are the chances of being audited? It depends.
- Overall, about 1.1% for individuals in FY 2011.
- If an individual return had adjusted gross income of $500,000 to $1,000,000, it was about five times as likely as the average to be audited.
- Almost 30% of individual returns with $10,000,000 or more of adjusted gross income were audited.
- Of the roughly 6.6 million math error notices that the IRS sent out relating to 2010 returns, 49.5% were caused by the Making Work Pay Credit, which was a refundable tax credit based on earned income and was available to taxpayers in 2009 and 2010.
- Businesses for which income or loss is reported on Form 1040 Schedule C (on returns without the Earned Income Credit) are almost 5 times as likely to be audited as partnership returns.
- About 70% of audits in FY 2011 were correspondence audits. That basically means a computer selected your return and is auditing it. Believe me; IRS people are a lot better to deal with than IRS computers.
- When you don’t have money to pay your taxes, you can submit an offer-in-compromise (“OIC”) to the IRS. In FY 2011, 59,000 OICs were received by the IRS and 20,000 were accepted. I was a bit surprised how high the acceptance rate was.
- The IRS received over 76 million toll-free assistance calls in FY 2011. The IRS does not tell you how long the average wait time is to receive assistance.
Those are just a few of the factoids in this year’s Data Book.