The odds are getting better that the Internal Revenue Service won't audit your individual income tax return.
But watch out if they do.Figures compiled for the IRS annual report show that the agency is examining a smaller and smaller share of returns. In the year ended Sept. 24, the IRS received 114,718,900 income tax returns for individuals but audited only 1,058,066. That's less than one out of a hundred.
The downward trend is shown in the percentage of audits conducted from 1988 through 1993 - 1.57, 1.29, 1.04, 1.17, 1.06 and now 0.92.
Even with fewer audits, however, Internal Revenue's demands for additional taxes and penalties are still brisk. Last year, it asked for $5.7 billion more than the audited individuals reported on their original returns. The previous year, the demands totaled $6.4 billion. For 1988-91, the totals in billions have been $6, $4.7, $5.3 and $6.8.
Internal Revenue's collections have held up as well as they have because computerized data increasingly give the agency firm leads on who might be skimping on tax payments. So individuals who are audited nowadays face greater odds that they will have to pay what the IRS wants.
The agency also has a declared policy of going where the money is, targeting groups that have reputations for avoiding taxes.
This includes corporations. Last year, the IRS examined 3.05 percent of all corporate returns, compared with only 1.35 percent in 1988.
Estate tax returns are another IRS hunting ground. Last year, it audited 16.9 percent of all estate tax returns; the bigger the estate, the more likely it is to be examined. Among gross estates worth more than $5 million, 53 percent were audited.