Posted on 01/29/2016 10:16:51 AM PST by Citizen Zed
If you made a mistake on your 2014 tax return, you might be in luck. You were less likely to be audited by the Internal Revenue Service than at any time since 2004. The initial data shows that only 1.23 million taxpayers were audited during fiscal 2015, representing a 0.84% audit rate. As a result, the money recovered via audits fell to $7.32 billion, which is a whopping 41% drop in collections and the lowest take since 2002. Between 2005 and 2010, revenue from audits averaged approximately $14.7 billion per year.
The audit rate is down for a simple reason, according to IRS Commissioner John Koskinen. The IRS has fewer auditors (or "revenue agents", to use IRS nomenclature) while the number of taxpayers has increased in three of the last four years. Under those conditions, audit rates cannot do anything else but decline. The IRS estimates that they receive $4 in revenue for every $1 that the IRS consumes, and there are 22% fewer auditors at the IRS than there were five years ago.
It is not as if the IRS could simply improve their efficiency to overcome for the lack of auditors. The IRS already uses algorithms and statistical formulas to focus resources on areas where non-compliance is more likely. For example, higher-income families and taxpayers who receive the Earned Income Tax Credit are more likely to be targeted. Why doesn't the IRS simply hire more auditors? Congress has not appropriated enough money for the IRS to do so, according to Koskinen. The agency's request for $12.9 billion in funding was trimmed to $10.1 billion by a Republican-controlled Congress. They are still steaming from the IRS's 2013 focus on groups with Republican-sounding names and the subsequent Congressional hearings that produced lots of sound and fury but little results.
The disclosure of a massive data breach earlier this year certainly did not help the IRS make their case as the vigilant stewards of our tax money. Using IRS information on many thousands of taxpayers, cybercriminals made off with an estimated $39 million through filing fraudulent tax returns.
The funding problems with the IRS extend beyond auditors, as anyone seeking IRS help on their 2014 taxes can verify. Long lines at IRS offices and massive telephone hold times were common. Only 40% of the calls to the IRS were answered at all last year, and at one point, callers who were on hold for two hours or more would receive a "courtesy disconnect" what most of us would call "being cut off." More than 8 million taxpayers experienced that particular headache. Constant callbacks only aggravated the traffic problem.
With resources likely to be limited next year as well, it seems reasonable that 2016 will be similar to 2015 with respect to the IRS. Tax help will be scarce, the audit rate will stay relatively low, and tax collections will stay low as well.
Isn't a lower number of audits good news for America? From a self-serving perspective, it may be. Nobody enjoys undergoing an audit. However, consider the larger perspective. If the IRS is not auditing a sufficient number of people, more people will get away with fraud, and even more people may be tempted to try. The corresponding loss of revenue eventually ends up as fewer government services or higher taxes spread out over the rest of us. It is a lot more fun to root against the IRS, but do we really want tax cheats to get off scot-free? Most of us would say no.
I want that entire agency gutted, destroyed, decimated, diminished and debilitated so badly they never come up to see the light of day.
I’m gonna self-censor on this one.
I told my wife I was going to be a bit more aggressive on my tax return this year. I've been doing tax returns for nearly 40 years, personal and business.
I usually let a few deductions slip by, just to avoid the hassle. Not so this year. The funny thing is, she's never had anything to do with our taxes, yet she strongly voiced her objections last night...lol.
It's my bon voyage present to Obama and Speaker Ryan...lol.
I doubt this statistic is really meaningful.
It probably means if you are a non-white male, your odds are virtually none, now. This was probably the largest category of folks who should be audited; shady. If you’re while male, and you used to be less likely; un-shady. Now white male is the target.
The auditors are all poring over selected 501c3 applications in excruciating detail, over and over again, not auditing.
Horse$hit! They'll continue the borrowing in DC...nothing will change until the credit card is denied.
Those poor bastards.
Sniff
Also keep in mind that if 0bamacare is repealed, those agents hired to persecute those that can't afford 'The Affordable Care Act' could go after real tax cheats.
That article is probably IRS click-bait, so they know whom to target for audits.
This is not a sign of a kinder, gentler IRS...
Darn. I knew I shoulda claimed my 27 child tax credits.
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