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"The technology will be complemented by hiring more top talent, including accountants and attorneys," Yellen said. "These additional resources will help us peel back complex corporate structures and large taxpaying entities – and make sure that they pay what they owe." That's because the IRS disproportionately targets low-income Americans when it conducts tax audits each year. In fact, households earning less than $25,000 a year are five times as likely to be audited by the agency than everyone else, according to an analysis of tax data from fiscal year 2021 by the Transactional Records Access Clearinghouse (TRAC) at Syracuse University.
The reason for that is a rise in what is known as "correspondence audits," meaning the IRS conducts reviews of tax returns via letters or phone calls rather than more complex face-to-face audits. Just a fraction – 100,000 of the 659,000 audits in 2021 – were conducted in person.According to the Syracuse study, more than half of the correspondence audits initiated by the IRS last year – 54% – involved low-income workers with gross receipts of less than $25,000 who claimed the earned income tax credit, an anti-poverty measure.
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