IRS Audits Of Rich People Is Down In A Very Disturbing Way

(PresidentialInsider.com)- According to the Government Accountability Office, the audit rate for Americans earning $5 million a year or more went from over 16 percent in 2010 to around 2 percent in 2019, which the GAO blames in part on the staffing and funding shortages at the Internal Revenue Service.

In a nutshell, in 2010, one out of six of America’s highest earners was being audited by the IRS. But in 2019, only one out of fifty was getting audited.

Naturally, lawmakers in Washington aren’t very happy about this, given their desire to extract every last penny they can from “the rich.”

According to the GAO, the decline in audits is directly related to the lack of funding for the IRS. In FY2021, the IRS had a budget of $11.9 billion, a $200 million decline from FY2010.

On top of that, the IRS has seen its staffing levels drop to 1973-levels, despite having millions more tax returns to process, not to mention the additional responsibilities mandated to the agency by Congress.

Two months ago, the IRS said it would hire an additional 10,000 workers to help tackle the backlog of 20 million unprocessed tax returns filed in April 2021.

The highest earners aren’t the only ones less likely to face audits. The rate of audits fell overall – from 0.9 percent in 2010 to 0.2 percent in 2019.

Even at the lower rate, wealthy earners are still getting audited at a much higher rate than the general taxpaying public. However, at the same time, the decline in audits among wealthy earners also fell at a much higher rate than the general taxpaying public.

The audit rate among those earning between $5 million and $10 million fell from 13.5 percent in 2010 to 1.4 percent in 2019.

Among those earning over $10 million, the audit rate went from 21.2 percent in 2010 to only 3.9 percent in 2019. However, during 2017 and 2018, the audit rate among the $10 million or more earners did increase slightly due to a Treasury Department mandate requiring an audit rate of at least 8 percent on those earning over $10 million.

With the staffing shortages and backlogs that plagued the IRS during the COVID pandemic, it is likely the audit rate for 2020 will be even lower.