Make Less Than $200K? You Probably Weren't Audited

IRS report shows millionaires audited much more frequently than middle class.

ByABC News
December 23, 2009, 10:06 AM

Dec. 23, 2009 — -- Wish you earned more than $200,000 a year? Here's at least one reason to be grateful if you don't: your chances of getting audited are extremely low.

If the income you listed on your tax return last year was less than $200,000, your chances of being audited were less than one percent in the 2009 fiscal year -- 0.96 percent to be exact, according to an Internal Revenue Service report released this week.

Of the nearly 134 million returns with incomes below $200,000, fewer than 1.3 million were audited, according to IRS enforcement statistics. Overall, 1.03 percent of Americans filing returns experienced IRS audits.

For the nation's rich, the news was more sobering: those reporting incomes of $1 million and more were audited at a rate of 6.42 percent, while those with incomes between $200,000 and $1 million saw audit rates of 2.89 percent.

"The IRS runs a balanced program targeted to areas of highest enforcement risk with a goal of maintaining faith and fairness in the tax system," IRS spokesman Eric Smith said in an e-mail to "Typically, more complex returns have more potential problems."

The number of audits rose among all income brackets since last year, but millionaires saw the greatest increase -- from 21,874 to 28,349 returns, an increase of nearly 30 percent. The number of audits for those earning less than $200,000 rose just 1.6 percent over last year.

On the business side, larger corporations were more likely than smaller ones to be audited in the '09 fiscal year. Fewer than 15 percent of corporations with assets of more than $10 million were audited while corporations with assets valued below $10 million were audited at a rate of just 0.85 percent.

The news that America's poor have such miniscule chances of being audited likely comes as cold comfort to the working poor who have already experienced audits.

That includes Rachel Porcaro, 32, a single mother of two, who spent more than a year fighting off an Internal Revenue Service demand that the Seattle woman pay the government $16,000 -- more than three-quarters of her then-annual salary as a hair dresser.