Jan 18, 2009

New 2008 IRS Enforcement Statistics- Surprise- less enforcement?

The IRS data on its 2008 enforcement results are mixed. If you owe, there was more enforcement with less results- if you were worried about an audit- good news- less enforcement and less results. Most of the IRS enforcement falloff was due to the agencies emergency management of the 2008 stimulus payments. Many IRS personnel were taken off of front line enforcement positions in order to service questions on the stimulus payments.

Here are some FY 2008 (the IRS fiscal year ends the the government's fiscal year ending- September 30th) IRS Enforcement Data highlights:

1. IRS audit revenue and collection reduced- Audit enforcement revenue decreased from $23.8 billion to $20.6 billion; and Collection enforcement revenue decreased slightly from $31.8 billion to $31.1 billion
2. The number of IRS Revenue Officers (Collection personnel) decreased from 5,662 to 5,492.
3. The number of IRS Revenue Agents (Field audit personnel) decreased from 12,816 to 12,599. Also, similar drops in IRS Special Agents- i.e. criminal investigators - dropped also- there are only 2,631 remaining
4. The IRS had increased all of these positions in the two years prior
5. The IRS Information Document matching (IRP program and Automated Underreporter Unit - i.e. CP 2000 letters) had a major increase in enforcement- from $3.9 billion to $4.7 billion
6. If your income was between $200,000 and $1 million- your chance of audit substantially increased- to the extent that almost 3% of these returns filed are now being examined by the IRS by Field agents or by correspondence examiners
7. Levies dropped by 30%- after 7 straight years of dramatic increases in this IRS enforcement area
8. However, IRS tax liens increased by 12%- so the IRS makes sure that the tax debt does not get outside of its ability to collect in the future.

It appears that the IRS' management of the stimulus payments had an impact on the enforcement results- especially in the area of levies. The IRS used many of its Automated Collection System personnel ("ACS") to answer taxpayer phones for the stimulus payment questions from February to October- thus- effecting their results.

But do not despair- enforcement will be back- no stimulus payments (yet?) for 2009- hence, you better resolve your problem, if you have one, before the IRS enforces it on you.

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