The IRS is going after the little guy

American Thinker ^ | 10 Mar, 2022 | Andrea Widburg

[MtnClimber]

There are several reasons for this, all of which point to the need for a massive overhaul of America’s tax system.

If you thought that the IRS audited complicated, high-dollar tax returns, think again. It turns out that the poorest among America’s taxpayers are the most likely to be audited. According to the Transactional Records Access Clearinghouse (TRAC), an organization dedicated to giving Americans information about what their federal government does and how much it costs, America’s lowest income earners are five times more likely to be audited than wealthier people.

TRAC reported that the IRS audited 0.4% of the 160 million individual income tax returns it processed each year. Most of these audits were accomplished by “correspondence audits.” This means that the IRS sends a letter to the taxpayer asking for documentation proving a specific line item in the return. Of the 659,003 audits the IRS conducted last year, 85% of them were correspondence audits.

What’s noteworthy is the targets of these very simple audits:

[O]ver half of these correspondence audits were targeted at the small proportion of workers with incomes so low they had claimed an anti-poverty earned tax credit to offset the tax otherwise due on their modest earned income. To repeat: over half – fully 54 percent – of all correspondence audits last year targeted the small proportion of returns with gross receipts of less than $25,000 claiming an earned income tax credit.

Even taxpayers with total positive income from $200,000 to $1,000,000 had only one-third the odds of audit compared with these lowest income wage earners. A total of nearly 9 million taxpayers reported these high-income levels. Yet less than 40 thousand of their returns were audited by the IRS in FY 2021 – just 4.5 out of every 1,000 of these returns.

[MtnClimber]

The left hates the middle class. I wonder if Hillary has ever been audited?

[sauropod]

You mean, like, with a cloth?

[DCBryan1]

“Wealthy people” (whatever the hell that is...probably any family of 4 making 200k) might be able to afford a CPA or tax attorney, those living paycheck to paycheck usually have to roll over to the .gov. Damn sad. Kind of like being an FFL and have F-Troop bust up your freedom now and then.

[dangus]

This is absolutely true about the IRS. In general, the poor and middle class have their money taken from them, and have to prove every credit and deduction to get it back. The rich simply claim what they want, and hope they don’t get an audit.

[high info voter]

Well they certainly don't want to audit these corrupt millionere politicians that have spent decades getting rich while screwing the American people.

I think we need to ditch the IRS and just put a national sales tax to work..... tons of crooks and drug runners would be paying taxes!

[central_va]

"Over half of these correspondence audits were targeted at the small proportion of workers with incomes so low they had claimed an anti-poverty earned tax credit to offset the tax otherwise due on their modest earned income. To repeat: over half – fully 54 percent – of all correspondence audits last year targeted the small proportion of returns with gross receipts of less than $25,000 claiming an earned income tax credit."

Good for the IRS. EITC is a scam.

[central_va]

I think we need to ditch the IRS and just put a national sales tax and a high across the board import tariff to promote domestic industry.

Fixed it.

[ClearCase_guy]

Also, I get the impression that if the poor and middle class are found to have made a mistake, then taxes and penalties get layered on top causing additional pain.

But I believe that on more than one occasion, the Clinton Foundation had a tax filing problem where they failed to pay millions, and they simply re-filed. No big deal.

[GaryCrow]

[O]ver half of these correspondence audits were targeted at the small proportion of workers with incomes so low they had claimed an anti-poverty earned tax credit to offset the tax otherwise due on their modest earned income. To repeat: over half – fully 54 percent – of all correspondence audits last year targeted the small proportion of returns with gross receipts of less than $25,000 claiming an earned income tax credit.

With good reason.

The Earned Income Tax Credit is easily the most fraud ridden tax program there is. My dad made his living owning several H&R Block income tax offices. The stuff he saw would make your head spin. Customers who had more children than they needed to claim the tax credit would sell the social security numbers of their kids to the highest bidder so they could falsely be claimed on another's tax return in order to fraudulently claim the Earned Income Tax Credit. Men and woman living together under the same roof would each claim to be Head of Household and one would claim a couple of kids while the other claimed the rest so they could both get the EITC. The amount of outright fraud with the EITC is staggering. I'd estimate 90% of the EITC claims are fraudulent.

That's why the IRS is auditing them. It's not that they're picking on the little guy, it's that the vast majority of those claiming the EITC don't qualify for it. It costs the government untold billions in fraudulent EITC every year.

EITC also isn't a tax offset, it's a welfare program administered by the IRS. Most people getting it don't pay any taxes to offset, they get money they never paid in. It's not a refund if you never paid anything to begin with, it's a welfare check.

[mewzilla]

Check out the omnibus spending bill.

The IRS gets a huge increase.

[I want the USA back]

The tax laws are designed to be impossible to follow. That enables them to keep the folks in a major state of anxiety over their earnings so they will submit willingly to the confiscation of their money.

[ExSES]

EITC also isn't a tax offset, it's a welfare program administered by the IRS. Most people getting it don't pay any taxes to offset, they get money they never paid in. It's not a refund if you never paid anything to begin with, it's a welfare check.

Couldn't agree more... Anyone involved in tax preparation sees these fraudulent activities daily. There are even Social Activists" who hold meetings to explain how easy it is to get "Free Money" from the IRS...

[MulberryDraw]

The IRS is being turned into the Internal Negative-Revenue Service.

[Roccus]

Never let the facts interfere with a good, outrage story.

[Bernard]

The amount of c heating that goes on with the EIC is incredible. The bad news is that it is not audited enough. The IRS should pursue this even more; after all, you get the best results when you go fishing where the fish are.

Sorry, author, you are just another journalist with good intentions who read some statistics and made a tearful story.

[babble-on]

Standard Widburg warning: She makes things up.

[STJPII]

They also politicize audits. Just ask prolife professor Henderschott. Or the Texas Tea Party founder

[struggle]

The vast majority of those are people that are filing no income or very little income with hundreds of deductions. Most middle class don’t get touched by audit.

[sitetest]

Bad article with loaded, based terms.

The IRS goes after returns with “anti-poverty” earned income tax credit claims because it’s been shown that a high proportion of these claims are fraudulent.

EITC have been historically easy ways to steal.