WSJ: IRS Personal Income-Tax Audits Drop to Lowest Level in Decades

NewsMax ^ | 01/09/2020

[SeekAndFind]

Tax enforcement by the Internal Revenue Service has reportedly tumbled to the lowest level in at least four decades.

Just 0.45% of individuals were audited in 2019, down from 0.59% in 2018 and marking the eighth straight year of decline, following years of budget cuts, the Wall Street Journal recently reported.

That figure is down more than half from when the IRS audited 1.1% of tax returns in 2010.

In other words, roughly 1 out of every 220 taxpayers were audited last year. A decade ago, those odds were closer to 1 in 90, CNBC explained.

The IRS said it identified $1.8 billion in tax fraud in 2019, along with an additional $4.4 billion in other financial crimes, such as money laundering or other fraud.

An IRS report issued this week doesn’t break down audits by income category or provide details about how much revenue they generate, the Journal explained.

As a result, the Treasury is letting billions of dollars annually go uncollected, even as budget deficits rise, tax experts told the WSJ.

“The audit rate reported for 2019 was less than half of what it was in 2010, underscoring the depleted state of the IRS enforcement function, which urgently needs to be rebuilt,” said Chuck Marr, director of federal tax policy at the Center on Budget and Policy Priorities, a progressive group in Washington.

Charles Rettig, the IRS commissioner appointed by President Trump, has been trying to implement a new strategic plan for the agency and has said it remains aggressive in finding people who aren’t following the law, WSJ.com explained.

“Our compliance employees have a commitment to fraud awareness as we continue our enforcement efforts in the offshore and other more traditional compliance-challenged arenas,” Rettig wrote in Monday’s report.

[PeterPrinciple]

roughly 1 out of every 220 taxpayers were audited last year.

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Those are computer audits, not on site audits.

[dhs12345]

Wonder if your chances of an audit are increased if you file electronically?

[RayChuang88]

Actually, actual paper filed returns tend to get more scrutiny. Really easy to “fudge” paper returns in many cases.

[Dilbert San Diego]

I’ve always heard, that your chances of audit are greater if you claim unusually high deductions for your income level, and/or if an individual or businesses has a very high gross income.

I used to work for a major corporation, which was audited by the IRS every year. I was on the periphery of the financial management team, but, there were a couple years in which additional taxes were owed. IRS doesn’t publicize criteria for audit, but, I’m sure they tend to audit where there is a good chance of collecting additional taxes.

[Roccus]

Perhaps the IRS is spending more time using its resources to eliminate the hundreds of millions of dollars in fraudulent and erroneous tax “refunds” it hands out annually.

One can only hope.

[PGR88]

eliminate the Internal Robbery Service

[dhs12345]

Seems like the IRS could “audit” every electronically submitted return. It would take a fraction of a second for them to read it in and another fraction of a section to compute the totals and verify them the from the tables and employer records. Not sure how ancillary forms are submitted and entered into the database but those could be electronic too.

It would save a huge amount of time if the whole process was completely electronic.

A paper submittal requires a human to read them and review them.

[Raycpa]

Not good, not good at all.

[ChildOfThe60s]

My father, an officer and a gentleman (USMC), who had NEVER been audited in 50 years, wrote a polite but critical letter to Bill Clinton and was audited for the next 3 years running. His returns were always straight by the books, no fudging.

I don’t believe in that kind of coincidence.

[unixfox]

Los Lerner is STILL walking free.

[Pelham]

Lois Lerner was arguably the first of Obama’s deep state loyalists to get exposed. And nothing came of it.

[unixfox]

Bitch should be stoned to death.

[olesigh]

and her bosses

[unixfox]

And all that were complicit. Which means the entire IRS.

[catnipman]

“Really easy to “fudge” paper returns in many cases.”

and hundreds of times more likely to make calculation, data entry, logic, and misunderstanding/ignoring instruction errors on paper

[catnipman]

“Seems like the IRS could “audit” every electronically submitted return. It would take a fraction of a second for them to read it in and another fraction of a section to compute the totals and verify them the from the tables and employer records.”

indeed, that is in fact exactly what is done for ALL submissions, though obviously electronically submitted ones don’t have to wait for the extra data-entry step of the IRS converting paper returns to electronic ones ...

However, those automatic checks are not audits: the IRS computer checks are simply looking for various errors relating to mismatches between the return and the various W-2, 1099 and other income related data submitted by payers to the IRS, as well as data entry, logic, and mathematical errors that mostly occur on paper returns ...

[WASCWatch]

How do they audit people who don’t file because they honestly believe they are not required to file?

Google “Joe Bannister”

[dila813]

1 out 220 is about right

[dhs12345]

Do they check >all< returns for accuracy? Or just sample check? And sample audit people? Of course, there is probably a qualifier for someone who has made “mistakes” in the past or has failed audits before. They may have other qualifiers such as the type of return submitted, deductions, etc.

It is to the IRS’s advantage to have the returns submitted electronically. Seems like an astronomically huge task to manually enter all returns of all of-age Americans into a computer database.

Again, just saying that the IRS would be able to check a return in a fraction of a second if electronically submitted vs an hour or more if submitted as paper; even longer if it is handwritten (which is also legal).