| Total Individual returns audited increased by over 6% to 1,293,681 in 2006 from 1,215,000 in 2005. That’s the highest number since 1998. Some people have dismissed our audit increases because of our use of correspondence, or letter exams. While correspondence exams are an effective, efficient enforcement tool that we continue to rely on, it’s important to note there’s an even bigger increase in our field exams – these are the traditional, sit-down audits. The number of field audits increased nearly 23% in 2006 from the previous year, and they climbed by more than half from the level in 2004. |
Audits of S Corporation returns increased to 13,984 from 10,417, a 34% increase. This is the highest level since 2000.
For Partnerships, audits of these flow-through returns increased to 9,777 from 8,489, a 15% increase. This category is at the highest level since 1998.
Audits of Small Businesses organized as corporations remained about the same. 17,871 audits were completed in 2006, up slightly from 17,858 in 2005.Both of these figures are more than double the 7,294 audits of small businesses in 2004.
Audits of Larger Corporations – those with assets over $10 million – dipped by 2.2%, to 10,591 from 10,829 in 2005.While down slightly this year, audits remain up nearly 50 percent from 2003. |
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"Audits of individuals with incomes over $100,000 surpassed 257,000, an 18% increase from 2005. That’s the highest figure in more than a decade, and well over double the 92,000 completed in fiscal year 2001."
"In our collection activities, levies and liens continue to top their 1998 levels. Levies increased by 36% to 3,742,276.Liens rose nearly 20% to 629,813."
"In addition to increased exam activity, we introduced a new program in 2004 using non-traditional compliance contacts to expand our enforcement presence within the tax-exempt community. These compliance contacts have been instrumental in addressing problem areas in sectors such as hospitals, executive compensation and credit counseling. In Fiscal 2006, we completed over 5,200 of these new compliance contacts, over and above the traditional examination program. This is a 31% increase from the previous year. Before 2004, we weren’t doing any of these contacts."
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