Chances of being Audited by IRS Dips to 11-Year Low

Tuesday, November 10, 2015
(graphic: CBS/AP)

The chance of being audited by the Internal Revenue Service (IRS) hasn’t reached zero yet, but it’s getting close, with the number of audits reaching an 11-year low.


Budget cuts by Congress have forced the IRS to lay off thousands of workers, including those who review income tax returns. The cuts have resulted in the audit rate for individual tax returns dipping to 0.84% for fiscal year 2015. That’s the lowest rate since 2004, according to IRS Commissioner John Koskinen.


“The IRS completed about 1.2 million individual audits in fiscal 2015. That’s 13,700 fewer than the previous year. Even more disturbing, the decline in audits in 2015 was not a one-year aberration. The number for 2015 was 350,000 below five years ago. That’s a drop of 22 percent, and corresponds exactly to the number of revenue agents, which is also down 22 percent since 2010,” Koskinen told the American Institute of Certified Public Accountants, according to Government Executive.


The IRS has lost 15,000 workers since 2010, but at the same time, the number of income tax returns filed by individuals went up 3%, to 146 million.


“Between 2005 and 2010, the revenue generated from audits averaged $14.7 billion annually. But since 2010, it has averaged only $10.5 billion a year, which is a drop of nearly 30 percent, and translates to more than $20 billion in uncollected revenue over the past five years,” Koskinen said.


Republicans have worked to cut funding for the IRS, particularly since they accused it of unfairly targeting right-wing organizations for audits, according to The Wall Street Journal. Some House Republicans even released articles of impeachment against Koskinen, claiming he had hindered their investigations into the agency.


Koskinen is still trying to get more funding in the coming year, however. “My hope is that we’ve made a compelling case as to why we need the resources and particularly, specifically, what would happen with each dollar we get,” Koskinen said last month after testifying at a Senate Finance Committee hearing, according to the Journal. “If you’re worried about the deficit, you’re worried about offsets, it doesn’t make sense to take your revenue arm, starve it of funds and watch your collections go down by a greater amount.”

-Noel Brinkerhoff, Steve Straehley


To Learn More:

There’s Now a Less Than 1 Percent Chance Your Tax Returns Will Be Audited (by Charles S. Clark, Government Executive)

IRS Audits of Individuals Drop to 11-Year Low (by Richard Rubin, Wall St. Journal)

Ironically, Slim Chance of IRS Audit Means Big Tax Problems (by Robert W. Woods, Forbes)

IRS Audit Rate Dropping Lower and Lower (by Noel Brinkerhoff, AllGov)

IRS Plans to Cut Back Auditing of Large Corporations (by Noel Brinkerhoff and Danny Biederman, AllGov)


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