Transactional Records Access Clearinghouse: “The latest data from the IRS show an alarming and continued downward spiral in government audits of the wealthiest taxpayers and America’s corporate giants. Despite growing income inequality – where the top 1 percent of Americans control much of the wealth in the United States – less and less attention is being given by federal agents and investigators to determine whether these same individuals and businesses properly report their true incomes and pay taxes on these dollars. Billions of dollars are arguably at stake, as is American faith in the fairness of our federal tax system.
- Audits of Millionaires: 97 out of every 100 taxpayers reporting over a million dollars of income were not audited last year. In FY 2010, such audits turned up $5.1 billion in unreported taxes. Now with just half the audits, the government uncovered only $1.9 billion in unreported taxes in FY 2018.
- Audits of Corporate Giants: More than half of the 633 largest corporations in the country – those with over $20 billion in assets – were not even audited last year. This is the first year that the audit rate has slipped below 50 percent. As recently as 2010, nearly all such returns (96%) were being examined by IRS. Audits in 2010 of large corporations (>$250 million in assets) turned up $23.7 billion dollars in unreported taxes. This had dropped in half to just $12.5 billion during FY 2018.
- Criminal Prosecutions: IRS referrals of taxpayers for criminal prosecution relative to population size have plummeted by 75 percent in the last twenty-five years, dropping by 63 percent in just the last five years. The number of taxpayers convicted as a result of IRS investigations reached an all-time low in FY 2018. There were only 530 convictions for tax fraud.
- For years, Congress has imposed severe funding and staffing cuts on the agency. Back in 2010 IRS had just over 100,000 employees on the payroll. By June 2018, staffing had fallen by 22 percent to just 79,071. Revenue agents and criminal investigators had fallen even more. Despite the additional responsibilities IRS was assigned to implement the December 2017 tax changes, IRS had 3,000 fewer employees than it had before this act was passed.”
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