A recent report reveals that the IRS audits more middle-class taxpayers than high-income earners, contrary to President Biden's promises.
The Audit Findings
The Treasury Inspector General for Tax Administration (TIGTA) recently audited the IRS's progress on its mandates. The audit found two significant issues: the IRS is slow in hiring new agents, and it continues to focus audits on middle-class taxpayers instead of high-income earners.
Delayed Progress
Despite the Biden Administration's goal to audit more high-income taxpayers, the IRS has been slow to implement this change. The IRS's strategic plan, released in April 2023, promised to focus future audits on individuals making at least $400,000. However, TIGTA noted that the plan lacked specific details on achieving this commitment.
Current IRS Audit Focus
Data shows that 63% of new IRS audits target taxpayers earning less than $200,000, while only a small percentage of audits focus on the wealthiest taxpayers. About 80% of audits cover individuals earning less than $1 million.
Broken Promises Regarding the Focus of IRS Audits
Back in August 2022, the IRS assured the public that an $80 billion funding boost would help target millionaire and billionaire tax evaders. This funding aimed to hire 87,000 new workers over ten years. However, in the first six months, the IRS hired only 34 new agents instead of the planned 3,700.
Implications for Taxpayers
Middle-class taxpayers should be aware that the IRS's audit focus has not shifted as promised. It's essential to keep thorough records and receipts, especially for charitable donations, as audits are still prevalent among those earning less than $200,000.
Don't Find Yourself on the IRS's Radar
If you happen to find yourself the IRS's crosshairs, don't take it lightly. They're ramping up to tackle as much of what they see as tax crimes as possible. You definitely need someone in your court for any of what the IRS might plan on leveraging against you.
And you always need to know what the IRS knows about your situation. That's what my team and I are here for. If you find yourself looking at any concerning tax situation, contact me or any member of my Tax Problem Solver team for help immediately. We'll start the ball rolling and take care of things for you. Rest assured you'll be in the best hands!
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