The White House has stated that the Inflation Reduction Act will lead to increased audits of multimillionaires.
In a study of 2022 tax returns, the IRS found that individuals with lower incomes were five times more likely to be audited than those with higher incomes.
National Taxpayer Advocate Erin M. Collins claims the IRS’s correspondence audit procedure is designed to “expend the least amount of resources to perform the maximum number of exams,” which results in “the lowest quality of customer care to taxpayers with the greatest need for assistance.”
Several fascinating trends have been uncovered by the Transactional Records Access Clearinghouse (TRAC) of Syracuse University, which began its data collection in 2022. The IRS’s auditing methods were scrutinized after the agency started using boilerplate letters.
More than 85 percent of taxpayers need to provide additional documentation or details to close out an IRS audit. Of the 164,000,000 individual tax returns filed in FY2021, 659,003 were randomly selected for audit. This number will decrease to 626,204 by the next fiscal year (2022).
Income tax audit rates are nearly quintuple from the highest income bracket (at 2.3 per 1,000 people) to the lowest (at 0.6 per 1,000 people) (12.7 per 1,000 individuals). Recently, auditors have narrowed their attention to 1.1% of millionaires or less.
A rate of 13 per 1,000 in FY 2021 is quite similar to the speed of 2.6 per 1,000 in FY 2020. (7.9 per 1,000).
As TRAC discovered, the IRS has been shifting its focus from billionaires to “easier targets in a period when IRS increasingly depends upon correspondence audits yet can’t help taxpayers or answer their inquiries” due to “severe budgetary restrictions throughout the years.”
“finally compel affluent tax cheaters to pay their due share,” so says White House insiders, thanks to President Biden’s Inflation Reduction Act (which has just lately begun to be implemented for wealthy Americans). This was mentioned on Fox News Digital.
It has been “years” since Republicans stopped financing the Internal Revenue Service despite claims from a lawmaker that the top 1% are responsible for $163 billion in annual tax evasion.
The United States Treasury and House Speaker Kevin McCarthy (R-Calif.) were reached for comment by Fox News Digital, but neither responded in time for publication.
Because of the Inflation Reduction Act’s influx of $80 billion, the IRS can now afford to perform more thorough audits of high-income individuals.