Audits of individuals with tax returns showing more than $1 million in income reached an all-time high of 12.48% in fiscal 2011, according to the Internal Revenue Service. That's up from 8.36% in fiscal 2010 and marks the third straight year of increases. "We have done a lot of work in the offshore area," said Steven Miller, deputy IRS commissioner for services and enforcement, as explanation for the increase. By contrast, the IRS audited 1.02% of individual taxpayers with incomes under $200,000 in 2011, about even with the previous year.

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