IRS steps up number of audits

WASHINGTON -- The Internal Revenue Service (news - web sites) put more low- and middle-income workers under the microscope last year. But wealthier taxpayers continued to face fewer audits.
The IRS reversed a long, sharp slide in the number of taxpayers facing audits, the agency reported. It audited 1 in every 172 individual tax returns in the 12 months ending Sept. 30, 2001. That was more than the year before, when 1 in 204 returns was audited.
But the number of audits was still down from recent years. In 1996, 1 in 60 returns was audited.
More than 640,000 poor and middle-income workers were audited last year, up from 518,000 the year before. If one's income was less than $100,000, the chance of an audit rose 22%. More than half of audited returns involved people who claimed the earned income tax credit, generally those earning less than $32,000 a year.
If a taxpayer's total income was above $100,000, the chance of being audited fell last year. About 1 in 126 returns with that much adjusted gross income was audited, an all-time low. That was down from 1 in 100 the prior year.