The IRS said audits for last year rose 7 percent for individuals, 14 percent for taxpayers earning more than $100,000, and 30 percent for those making $200,000 or more. Millionaires had a 1 in 11 chance of losing at audit roulette.
A test to see if divorced couples were correctly reporting alimony in California concluded that 40 percent of the taxpayers flubbed it, usually over several years. On average, they owed the state an additional $5,800 — and that was just tab before the IRS was notified.
Auditors commonly found recipients of alimony and family support failed to report it as income. Meanwhile, the spouses cutting checks often wrote off alimony that the divorce decree stipulated was neither taxable nor deductible, or erroneously deducted child-support payments.