Laura Davison has made available for download her article, “IRS’s Tax Audits Slid After End Of Program To Focus On Wealthy,” published in Financial Advisor The article begins as follows:
The Internal Revenue Service has completed fewer audits of wealthy taxpayers since ending a program to focus on top earners, leading to as much as $1.9 billion in tax dollars going uncollected, according to a watchdog report released Monday.
The IRS stopped a program in 2017 that focused on auditing individuals earning at least $200,000. As a result, the number of audits on high-income taxpayers fell about 37%, representing a drop to about 29,600 in fiscal year 2019 from more than 47,000 in fiscal year 2015, according to the Treasury Inspector General for Tax Administration.
The report recommended the IRS create a plan to identify taxpayers making at least $200,000 who may be underreporting their true income to avoid taxes. IRS management, in a response included in the report, disagreed with that recommendation and said that the current audit processes sufficiently target high-earning taxpayers.
Posted by Bella Hoang, Managing Associate Editor, Wealth Strategies Journal.