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Last year, the IRS targeted the lowest-income taxpayers for the most audits. No, that doesn’t make any sense.
The Transactional Records Access Clearinghouse at Syracuse University recently looked at whom the IRS is auditing. In 2021, the IRS audited 659,000 returns out of 160 million, according to the clearinghouse. That’s just 0.4 percent of returns. That’s actually a bit higher than in 2020, when it was 3 in 1,000.
One would think that it would be more efficient for the IRS to emphasize a review of higher-earning taxpayers. Those returns provide the most obvious bang for the buck.
But the IRS focused much of its efforts on taxpayers reporting less than $25,000 in wages. In 2021, the clearinghouse found those filers were five times as likely to be audited as other taxpayers.
Yes, some low-income earners fudge their returns, just like some wealthy filers do. But logic dictates that an agency with limited resources pay more attention to the latter.
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