IRS audit rate down in fiscal 2018

The IRS audited a slightly smaller percentage of individual tax returns in fiscal 2018, according to data released Monday.

The agency said that last year it audited about 892,000 individual returns, for a rate of 0.59 percent. That compares to audits of about 934,000 individual returns in fiscal 2017, a rate of 0.62 percent.

{mosads}The IRS’s audit rate of individual returns has declined every year since the early part of the decade, according to agency data.

In fiscal 2018, the IRS audited 6.66 percent of individual returns reporting adjusted gross income of at least $10 million, down from 14.52 percent the previous year.

The Wall Street Journal first reported on the audit data, which the IRS released as part of its 2018 databook.

The statistics come amid a debate over whether the IRS should see its enforcement budget boosted in order to bring in more revenue to the federal government and reduce the “tax gap” between the amount of taxes owed and the amount paid.

The IRS’s budget is smaller than it was in 2010, and the agency has fewer enforcement employees than it did that year.

At a hearing earlier this month, Treasury Inspector General for Tax Administration J. Russell George said that the IRS is collecting more than $3 billion less than it otherwise could each year because of a staffing decline in revenue officers.

President Trump’s fiscal 2020 budget proposes a $200 million budget increase for the IRS, as well as $14.5 billion in spending outside of the budget caps over 10 years for tax enforcement.

Congressional Democrats have long been interested in giving the IRS more funding.

“From 2017 to 2018, audits of taxpayers with more than $10 million in income were cut in half. On top of massive tax breaks, wealthy taxpayers with savvy accountants may not even pay what they do owe, knowing that tax avoidance and evasion strategies are unlikely to receive scrutiny,” Senate Finance Committee ranking member Ron Wyden (D-Ore.) said in a statement Monday. “Congress needs to give the IRS the sustained resources it needs to ensure high fliers pay their taxes.”

But many Republicans in Congress have been skeptical, arguing that the IRS should first focus on using the resources that it has more efficiently. 

– updated at 6:27 p.m.