IRS Audits Decline
About IRS Audits Decline
IRS audit rates have declined dramatically since 2010. The audit rate for individual taxpayers fell from 0.9 percent in 2010 to 0.25 percent in 2019. Audit rates for corporations and high income taxpayers also declined. The decline was driven by budget cuts. The IRS budget fell by 20 percent in real terms between 2010 and 2020, while the taxpayer population grew. The declining audit rates particularly benefited wealthy taxpayers and large corporations, who can afford sophisticated tax advisors. Audit rates for low income taxpayers claiming the EITC remained relatively stable, meaning the IRS was more likely to audit a poor person than a rich one. The IRA funding for the IRS is intended to reverse this trend by increasing audits of high income taxpayers and large partnerships.
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