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January 5, 2023

Report Contrasts IRS Audits Of Millionaires, Lowest Earners
By Emlyn Cameron

The percentage of tax returns of those earning at least $1 million that were audited by IRS agents was lower than the cumulative percentage of the lowest-income returns subject to any type IRS audit in 2022, according to a report by a research center. The Transactional Records Access Clearinghouse, which analyzes data regarding the federal government, said Wednesday that 1.1% of returns of people making at least $1 million were audited by Internal Revenue Service agents tasked with handling the agency's complex cases in 2022. That was lower than the percentage of all audits — those conducted by IRS agents, examiners and compliance officers, as well as those conducted by letter — on returns for taxpayers in the lowest income group, which was 1.27%, TRAC said. TRAC dismissed audits of millionaires conducted by letter as a "fiction," and the 1.1% also appears to exclude audits done by the agency's tax examiners and compliance officers, who are assigned simpler issues. Based on the data in TRAC's report, if only audits conducted by revenue agents were considered for the lowest income group, the number would be closer to 0.013%. Roughly 2.38% of returns for those making at least $1 million were audited, if correspondence audits and those performed by compliance officers and examiners are included in the total, according to the report's data. TRAC acknowledged that millionaires in 2022 were subject to the highest rates of audit as broadly defined but said that its lower 1.1% figure "ignores the fiction of auditing a millionaire through simply sending a letter through the mail."

Transactional Records Access Clearinghouse, Syracuse University
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