Taxable Talk

The IRS released the statistics on the most recent tax season last week. The good: customer satisfaction with the IRS toll-free telephone line (for answering tax questions) has risen to 94%. Do note that there is still a significant chance of the IRS giving you the wrong answer to your question but at least you'll be happy.

The bad: audits are up. These statistics are from the 2006 fiscal year:

- If your income was more than $1 million, your chance of being audited was 9.25%, up from 6.3%. That's an increase of 84%;

- If your income was between $200,000 and $1 million, your chance of being audited was 2.87%, up from 2.57%. That's an increase of 29%;

- If your income was between $100,000 and $200,000, your chance of being audited was 1.77%, up from 1.67%. That's an increase of 14%; and

- If your income was under $100,000, your chance of being audited was 0.93%, up from 0.89%. That's an increase of 5%.

[Note that the percentage increases are based on the total number of audits (which I'm not reproducing here), not the change in the percentage of individuals being audited.]

No matter, your chance of being audited has increased. The IRS (and Congress) have figured out there's money to be made in audits, so don't expect this trend to change any time soon.

Other Coverage: TaxProfBlog, Roth Tax Updates, and Don't Mess with Taxes.