A recent Forbes article by Ashlea Ebeling summarizes some of the key take-away points regarding audit rates from this year’s IRS Data Book.
Some excerpts/ highlights:
For the highest income taxpayers—returns showing adjusted gross income of $10 million or more–the audit rate dropped from 14.52% in 2017 to just 6.66% in the latest report.
By comparison, for households with AGI under $200,000, the audit rate dropped slightly, stayed the same, or climbed (from 0.48% to 0.54% for $50,000 to $75,000 AGI households).
It’s not a surprise that audits are dropping overall. The IRS’ budget is smaller these days and its staff of enforcement workers is lean. Technology upgrades and enforcement wherewithal are among the agency’s most pressing funding needs.
In her recent annual report to Congress, National Taxpayer Advocate Nina Olson listed audits (correspondence exams, field exams and office exams) among the nation’s most serious tax problems.
Still, the Government Accountability Office says the tax gap—the difference between tax amounts that taxpayers should have paid and what they actually paid voluntarily and on time—as 82% of owed taxes, leaving an annual gap of $458 billion.