IRS Report of Enforcement and Service Results

IRS Report of Enforcement and Service Results

Last November (2006) IRS released its Fiscal Year 2006 Enforcement and Services Results report. Although it is statistical in nature, it is nevertheless enlightening and may show us a trend. Here are some selective pieces of information.

Staffing of Key Enforcement Occupations was at 25,215 in 1997, hit a low of 19,691 in 2003, and is now back to 21,185 for 2006.

Examinations (Field and Correspondence combined) were at 1.28% in 1997, hit a low of .49% in 2000, and is back to almost .98% in 2006.

Examinations of individuals with incomes under $100,000 increased from .45% in 2000 to .89% in 2006 with 82% of the examinations as correspondence audits (as opposed to field audits).

Examinations of individuals with incomes of $100,000 and higher increased from .79% in 2001 to 1.67% in 2006 with 56% as correspondence audits.

Examinations of individuals with incomes of $1,000,000 and higher increased from 5.03% in 2004 to 6.30% in 2006 with 55% as field audits. Note the higher percentage of field audits for these higher income people.

Business examinations:

- - Small corporation returns (Assets under $10 million) went from a low of .32% in 2004 to .80% in 2006 (was 2.22% back in 1997).

- - S Corporation returns went from a low of .19% in 2004 to .38% in 2006.

- - Partnership returns has relatively stayed the same recently running from .25% to .36% in 2006.

- - Tax exempt organizations returns from just under 5,000 returns in 2005 to over 7,000 in 2006.

Collection statistics:

- - Levies = 3,600,000 in 1997, down to 219,778 in 2000, up to 3,700,000 in 2006.

- - Liens = 543,000 in 1997, down to 167,867 in 1999, up to 629,000 in 2006.

Criminal investigations has been pretty steady recently at between 2100 and 2800 per year. The overall conviction rate has also remained steady at about 91.5% with the average sentence between 19-22 months.

Taxpayer service statistics:

- - E-filing was at 54% for 2006.

- - Toll-free tax law accuracy has increased from 80% to 91% in 2006.

- - Customer satisfaction rating has stayed at 94% recently.

Based on these statistics it appears IRS is conducting more examinations than in the past few years, in many cases double the examinations. Keeping on our toes and reminding our clients of their recordkeeping requirements is very important.

A copy of this 10 page report can be found at www.irs.gov by searching for “Enforcement and Service Results”. The link that shows up in our browser is http://www.irs.gov/pub/newsroom/11-06_enforcement_stats.pdf. We can also send you a pdf copy on request.

This text has been shared with you courtesy of: David & Mary Mellem, EAs & Ashwaubenon Tax Professionals, 920-496-1065 (fax 920-496-9111) , , , and .

©2007 Ashwaubenon Tax Professionals. No reproduction of this article is permitted without the express consent of Ashwaubenon Tax Professionals, 2140 Holmgren Way, Suite 1040, Green Bay, WI 54304.

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