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April 10, 2012

Audits of super-duper rich off to a slow start
By Blake Ellis

According to a report by the Transactional Records Access Clearinghouse (TRAC) at Syracuse University, a non-profit research group, the task force the IRS created to examine the tax filings of the nation's wealthiest individuals has completed the audits of very few taxpayers. Through a Freedom of Information Act order requesting performance statistics of the IRS's Global High Wealth Industry Group, the division that examines the tax filings of those with incomes or assets of $10 million or more, TRAC found that the agency has only completed 36 audits over the two and half years since the division's launch. "This global high wealth initiative was rolled out to great fanfare as a huge game changer," said Susan Long, co-director of TRAC. "While it takes a while to gear up, it's now been more than two years into the program and the IRS has stopped talking about it, and despite the big fanfare, we have hardly anything to show for it." For field audits, the average amount of time spent per millionaire audit has dropped 25% from 41.7 hours in 2007 to 31.4 hours last year, TRAC said. And this year, the average millionaire audit has taken only 15.6 hours. Therefore, as the agency spends less time on each audit, it can conduct more of them and report higher audit rates of millionaires. But by failing to send more taxpayers to the high wealth unit for more thorough audits, the IRS may not be investing the time and resources necessary to produce the full amount of tax owed, Long said. TRAC also noted the limited resources that the IRS has allocated to the high wealth division. TRAC found that the unit only has 101 agents assigned to it, compared to the average size of 1,012 of other groups within the IRS.

Transactional Records Access Clearinghouse, Syracuse University
Copyright 2012
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