Thursday, March 10, 2022
IRS Audits Of Poorest Families Soar While Millionaire Audits Continue To Languish
The Transactional Records Access Clearinghouse at Syracuse University has released a new report, IRS Audits Poorest Families at Five Times the Rate for Everyone Else:
A large increase in federal income tax audits targeting the poorest wage earners allowed the Internal Revenue Service to keep overall audit numbers from further declines for Americans as a whole during FY 2021. That resulted in these low-income wage earners with less than $25,000 in total gross receipts being audited at a rate five times higher than for everyone else.
To its credit last year, the IRS did manage to slightly raise the audits of millionaires. During FY 2021 IRS revenue agents and tax examiners audited 13,725 of taxpayers reporting $1 million dollars or more in positive income. This was up from the abysmally small numbers audited during FY 2020 (11,331), but still slightly below how many millionaire returns were audited during FY 2019 (13,970).
Despite this modest improvement, IRS was still only managing to conduct about a third of the millionaire audits it had completed during FY 2015. Then IRS had audited 39,753 millionaire returns.
Over this same short span of time, the odds of audit fell even more because the sheer number of millionaire returns has grown by 50 percent. Thus, the odds of audit have been plummeting. IRS recorded 617,505 millionaire returns filed that were available to be audited in FY 2021. With only 13,725 millionaire audits last year, more than 600,000 millionaire returns were NOT audited.
Axios, Tax Audits Drop For the Highest Earners