According to an analysis of IRS tax audit data from 2022, taxpayers in the lowest income band are five times more likely to be audited than those in the highest income bracket, Fox News informed.
National Taxpayer Advocate Erin M. Collins commented on the report during an annual report to Congress, saying that the IRS correspondence audit process is designed to use the fewest resources to carry out the greatest number of examinations, leading to the lowest level of customer service to taxpayers having the greatest need for assistance.
Each month, the Transactional Records Access Clearinghouse (TRAC) at Syracuse University reviews internal IRS management reports. By looking over 2022 data, the organization identified certain tendencies. The group focused mainly on audits, taking into account the agency’s increased reliance on letters generated automatically and mailed to taxpayers.
According to the data, the IRS conducted 85% of their audits using these letters, which ask for more details and supporting documents about particular topics of interest. Out of the 164 million income tax returns filed last year, there were 659,003 audits overall in FY 2021 and 626,204 in FY 2022.
When compared to those in the highest income group, the rate of income tax audits for those in the lowest income bracket was 12.7 per 1,000, an almost five-fold increase. A millionaire’s chances of being audited were roughly 1.1%.
This approximately mirrored similar figures for FY 2021—13 per 1,000 and 2.6 per 1,000, respectively—but the rate more than quadrupled from FY 2020, when the audit rate for those in the lowest income category was 7.9 per 1,000.
According to the TRAC research, the IRS was obliged to focus on easy targets due to “severe budget cuts over the years” since it was relying more and more on correspondence audits and didn’t have the resources to help individuals or reply to their inquiries.
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