The Transactional Records Access Clearinghouse keeps a close eye on what the U.S. government is up to, and can be pretty relentless in trying to shine a light in the dark corners of the bureaucracy.
They’ve battled the IRS in court to try to get the agency to be more forthcoming with its statistics, and they won, but the IRS continues to drag its heels.
Perhaps the reason for that is that what TRAC finds is going to require a lot of spin. Today they released the results of its study of the audits the IRS subjected taxpayers to :
[O]nly 30 of the nation’s thousands of millionaires were subject to a face-to-face IRS audit in . The very small number selected for the traditional and sometimes intensive audits were drawn from 184,054 individual tax returns reporting a total positive income of $1 million or more.
…the audit rate for America’s wealthiest taxpayers is substantially lower than for the poorest.…
Restricting the comparison to the agency’s comprehensive face-to-face audits, taxpayers reporting less than $25,000 in total positive income were six times more likely to be audited than those reporting $200,000 or more in income.
When the simpler and far more common correspondence audits are combined with the face-to-face audits, the poor taxpayers were still almost twice as likely to be audited as the wealthy.
And there’s more in the report. The overall gist of it seems to be that the IRS is inflating its audit numbers by targeting the returns of poorer people and smaller businesses — both because their returns tend to be simpler and easier to audit, and because the people who file such returns have a harder time fighting back.
See the IRS response here. They claim that the audit numbers that TRAC reports for millionaires are the result of the IRS changing the way it reports its data, and don’t accurately represent the rate of audits.
