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Working to raise its audit rates for the wealthiest Americans, according to the IRS a statement Released along with the agency’s annual data book, which covers activities for the financial year 2021.
According to the statement, the falling audit has drawn scrutiny from Congress, but the percentage has doubled for those making more than $10 million over $100,000 in the past seven months.
What’s more, audits for high-income taxpayers often fall later in the statutory period — within three years of a filing — audits for 2019 can still take place through at least 2023, the agency says.
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Still, the IRS says that “resource constraints” have limited the agency’s ability to audit high-net-worth individuals, large corporations and complex business structures, and since the 2010 tax year, reviews have been significantly reduced. There has been a decline.
The agency’s chief taxpayer experience officer, Ken Corbin, told House Oversight, “Audit rates are most likely to be reduced for taxpayers with incomes over $200,000, because high-income audits are more complex and auditors have to manually deal with many issues.” needs to be reviewed.” subcommittee in May
At present, the agency still has only 6,500 agents to deal with audits for high-income filers, according to May’s statement.
Although the IRS said in March It planned to hire 10,000 employees As for addressing the agency’s backlog, Corbyn acknowledged that recruiting has been a challenge. agency on Wednesday issued another call To appoint 4,000 delegates.
IRS audits declined 44 percent between fiscal years 2015 and 2019 2021 report From the Inspector General of Treasuries for Tax Administration. Audits declined 75% for filers earning $1 million or more, and 33% for low-to-moderate earners. earned income tax creditKnown as EITC.
Returns claiming the EITC had “historically higher rates of unfair payments and therefore required greater enforcement,” Corbyn said during a hearing of the May House oversight subcommittee.
Since many low-income filers are wage earners, audits are usually less complicated and may involve an automated process.
Americans earning more than $5 million a year had more than just one 2% chance of being audited in 2019 Compared to more than 16% in 2010, a . According to May report From the Government Accountability Office, a federal watchdog.
The report cited budget cuts as the primary reason for the decline, which fell to $11.9 billion for fiscal year 2021, $200 million less than in 2010 with limited staffing.