IRS got $2.8 billion less from audits than in '07

WASHINGTON — The amount of money the IRS collects from audits and other reviews fell by nearly $3 billion this year as the agency shifted resources to make sure people got their economic stimulus checks.

Overall, collections dropped to $56.4 billion for the fiscal year that ended Sept. 30 — a 4.7 percent decrease from $59.2 billion collected in 2007, the agency said Monday.

It was the first year-to-year decrease in collections in a decade.

In addition to its regular duties, the IRS issued 117 million payments totaling more than $95 billion as part of the federal economic stimulus program this past spring.

"There was the challenge of doing stimulus and it was a tight budget year. Key enforcement resources actually declined slightly," said Linda E. Stiff, deputy commissioner for services and enforcement. "The other key point to note is that 2007 was a record-breaking enforcement year, a high-water mark by any and all definitions."

Stiff said that, when comparing 2008 to 2006 and earlier years, "you still have a healthy increase and a good trend even though we weren't able to repeat the anomalies of 2007."

The number of audits of returns filed by individuals increased slightly this year. Those earning less than $200,000 had about a 1 percent chance of being audited. Those with incomes of more than $200,000 had about a 3 percent chance of being audited.

Meanwhile, taxpayers with incomes of more than $1 million had a 5.6 percent chance of being audited, a drop from 6.8 percent the year before. The number of audits for millionaires dropped even though their ranks increased by nearly 54,000. Sit-down audits with those making more than $1 million remained relatively flat. The big drop occurred with reviews conducted through correspondence.

Again, officials attributed part of that decline to staffing. They noted that the agency had about 465 fewer agents and officers in key enforcement occupations compared with the year before.