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The Internal Revenue Service has been increasing its tax audits of the lowest-income wage earners to keep its overall audit numbers from declining, according to a new report.
The report, from Syracuse University’s Transactional Records Access Clearinghouse, found that low-income workers earning less than $25,000 in total gross receipts were being audited at a rate five times higher than everybody else in fiscal year 2021. The results come from internal IRS reports released each month to TRAC under a court order after successful litigation under the Freedom of Information Act.
The IRS has come under pressure to increase its audit rates, despite budget constraints and limited staff during the pandemic, but advocates have mostly been urging the agency to step up audits of the wealthy and large corporations. Instead, the research from TRAC found that even taxpayers with income between $200,000 and $1 million had much lower odds of being audited compared with workers earning less than $25,000, including those who qualified for the Earned Income Tax Credit.
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