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MoneyWatch
Millionaire? Here's how likely you are to be audited by the IRS.
moneywatch
By Irina Ivanova
January 4, 2023 / 5:30 PM / MoneyWatch
The Biden administration has trumpeted its plans to crack down on rich tax evaders, funneling $46 billion to the IRS so it can ferret out money hidden by the ultra-wealthy.
For now, though, the chances of a high income earner being audited by the IRS remain vanishingly low. A new report released by the Transactional Records Access Clearinghouse at Syracuse University found that a millionaire's chances of coming face-to-face with an auditor fell in 2022 to just 1.1%.
Although IRS enforcement agents devote a quarter of their time to auditing millionaires, nearly 700,000 millionaires face "no scrutiny whatsoever," the group found.
The IRS was slightly more active with audits by mail — instances in which the agency asks for additional information on certain items in a person's tax return. Some 85% of all audits, and just under half of millionaire audits, were done by mail, TRAC found. Still, it called this form of enforcement a "fiction."
The number of millionaire tax returns the IRS audits every year has fallen from nearly 41,000 a decade ago to just 16,800 in 2022, with the pace of enforcement slowing as the agency lost funding and personnel.
"Severe budget cutbacks over the years meant that the IRS has examined fewer and fewer millionaire returns," TRAC said.
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