As per the IRS report, it has been revealed that numbers of millionaires who have received tax audit have doubled this year in comparison to 2011. The IRS said that in 2010 and in 2011, overall 1% of taxpayers were audited, but the percentage has jumped to 12% in 2012 for millionaires, who earn between $1 million and $5 million.
It seems that the more you earn, the more the IRS wants you. The IRS report revealed that 30% of the highest earners were dealt with audits, which is 18% more than 2011. The IRS said that their recent offshore tax evasion initiatives are the main reasons for such a rise.
The IRS said that they keep on taking out attractive offers, which make millionaires to approach them. To cite an example, the IRS is currently giving an incentive in which taxpayers will not get jail time and there will be fewer penalties as well. But there is a limited time period to declare their offshore accounts.
"It seems like the IRS is trying to show that it's paying more attention to millionaires and that their chance of an audit is higher than the average person", said Timothy Gagnon, who is an assistant academic specialist of Accounting at Northeastern University.
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