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Syracuse University’s Transactional Records Access Clearinghouse (TRAC), a nonprofit data and research gathering organization, found in a review of monthly IRS management reports that only 1 in 100 millionaires was audited by an IRS revenue agent last year. Out of the 703,576 tax returns filed in 2022 reporting an income of at least $1 million, roughly 689,000 faced no IRS inquiry.
To put that into context: A decade ago, the IRS audited 40,965 returns filed by millionaires, TRAC says. That number fell by nearly 75% to a bottom of 11,331 in 2020.
TRAC said for those who did come under IRS scrutiny in 2022, automated correspondence audits — or letters asking for more documentation on a specific item via mail — mostly replaced more thorough in-person audits. Eighty-five percent of all audits of 1040 returns (the standard form filed by individual taxpayers) were conducted by mail in 2022.
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