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The IRS Audit Rate Keeps Falling, Now Below 7% for Households Making $10 Million or More

Michael Rainey
The IRS audited just 892,000 individual tax returns last year, for an audit rate of 0.59%, the IRS said Monday. That marks the seventh year in a row that the audit rate has fallen.The IRS Data Book for fiscal year 2018 shows that audits of high-income households fell particularly sharply. Last year, the IRS audited 6.66% of households reporting more than $10 million in income, down from 14.52% the year before – and $34.69% in 2015.Critics say the IRS is being starved of the resources it needs to do its job, noting that the agency’s budget is 19% smaller than it was in 2010, adjusted for inflation. Treasury Inspector General for Tax Administration J. Russell George testified earlier this month that the IRS was missing out on at least $3 billion in revenues each year due to a lack of personnel.President Trump’s 2020 budget calls for a 1.5% increase for the IRS budget, as well as $15 billion over 10 years for enforcement. The White House said the increased funding would more than pay for itself through stricter enforcement.Republicans lawmakers, who have cut the agency’s budget for years, have expressed skepticism about increasing the IRS budget. “I’m not averse to beefing up their budget a little bit but I want to see results,” Sen. John Kennedy (R-LA), who heads the subcommittee that oversees the IRS budget, told The Wall Street Journal’s Richard Rubin. “I’ve got a lot of confidence in the new commissioner and in the new secretary, but I’m not into just throwing money at the wall because the bureaucracy says we need more.”Like what you're reading? Sign up for our free newsletter.

The IRS audited just 892,000 individual tax returns last year, for an audit rate of 0.59%, the IRS said Monday. That marks the seventh year in a row that the audit rate has fallen.

The IRS Data Book for fiscal year 2018 shows that audits of high-income households fell particularly sharply. Last year, the IRS audited 6.66% of households reporting more than $10 million in income, down from 14.52% the year before – and $34.69% in 2015.

Critics say the IRS is being starved of the resources it needs to do its job, noting that the agency’s budget is 19% smaller than it was in 2010, adjusted for inflation. Treasury Inspector General for Tax Administration J. Russell George testified earlier this month that the IRS was missing out on at least $3 billion in revenues each year due to a lack of personnel.

President Trump’s 2020 budget calls for a 1.5% increase for the IRS budget, as well as $15 billion over 10 years for enforcement. The White House said the increased funding would more than pay for itself through stricter enforcement.

Republicans lawmakers, who have cut the agency’s budget for years, have expressed skepticism about increasing the IRS budget. “I’m not averse to beefing up their budget a little bit but I want to see results,” Sen. John Kennedy (R-LA), who heads the subcommittee that oversees the IRS budget, told The Wall Street Journal’s Richard Rubin. “I’ve got a lot of confidence in the new commissioner and in the new secretary, but I’m not into just throwing money at the wall because the bureaucracy says we need more.”

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