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Study Finds Lower Income People More Likely To Be Audited Than Rich

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OPINION: This article may contain commentary which reflects the author's opinion.


As the Biden administration approved funding new IRS agents a study has found that people in the lowest income bracket are five times more likely to be audited than the rich.

“The IRS correspondence audit process is structured to expend the least amount of resources to conduct the largest number of examinations – resulting in the lowest level of customer service to taxpayers having the greatest need for assistance,” National Taxpayer Advocate Erin M. Collins said to Congress of the 2022 study, Fox News reported.

The Transactional Records Access Clearinghouse (TRAC) at Syracuse University examines internal IRS management reports each month, and the group noticed different trends by reviewing 2022 data. Most notably, the group looked at audits, particularly considering the agency relying more heavily on automatically produced letters sent to taxpayers. 

The data showed that the IRS conducted 85% of its audits through these letters, which request additional information and documentation related to specific items of interest. Overall audits dropped from 659,003 in FY 2021 to 626,204 in FY 2022 out of 164 million income tax returns filed last year. 

The rate of income tax audits for those in the lowest income bracket hit 12.7 per 1,000, compared to 2.3 per 1,000 among those in the highest – a nearly five-fold increase. The odds of a millionaire facing an audit were around 1.1%.

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The report said that the lack of attention to the rich was because of “severe budget cutbacks over the years” that meant the agency had to focus on “easy marks in an era when IRS increasingly relies upon correspondence audits yet doesn’t have the resources to assist taxpayers or answer their questions.”

A spokesperson for the White House said that President Joe Biden’s new plan would make it tougher for the wealthy to cheat on their taxes.

“President Biden’s Inflation Reduction Act, which is only beginning to build enforcement for wealthy Americans, will finally force wealthy tax cheats to pay their fair share while making it easier for working Americans to get their tax refunds,” they said.

But new House Speaker Kevin McCarthy said that Republicans are going to attempt to repeal the funding for the new IRS agents.

“On our very first bill, we’re going to repeal 87,000 IRS agents,” he said. “Our job is to work for you, not go after you.”

In December a top, long-serving Democratic senator has been accused of attempting to utilize the Justice Department and the Internal Revenue Service as political tools against conservative organizations.

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“Sen. Sheldon Whitehouse, D-R.I., called for revoking a tax exemption for a conservative group for not masking up and socially distancing during the pandemic, insisted on a slew of investigations of other conservative groups, and pressed for the Internal Revenue Service to expand its reach,” the Daily Signal reported exclusively last week.

The outlet added: “A total of 176 pages of correspondence from and to Whitehouse was obtained from the IRS by the conservative watchdog group American Accountability Foundation through the Freedom of Information Act and shared with The Daily Signal.”

“It’s abundantly clear that [Whitehouse] is trying to take the 87,000 new IRS agents and put them to work investigating me and my friends because he doesn’t like their politics,” said Tom Jones, president and founder of the American Accountability Foundation, in an interview with The Daily Signal.

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The dates of the letters Whitehouse sent span from Jan. 19, 2021, just a day before President Joe Biden’s inauguration, to May of this year, the Daily Signal added.

“It’s Lois Lerner on steroids,” Jones said regarding the Whitehouse correspondence, a reference to the IRS official at the center of an Obama-era scandal in which she was accused of inappropriately targeting Tea Party groups ahead of the 2012 presidential election.

“The Lois Lerner stuff was a mid-level bureaucrat abusing [her] power to investigate conservative groups,” Jones told the Daily Signal. “This is a U.S. senator basically trying to turn the heat up on investigations by the Internal Revenue Service.”

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“So, if Sheldon Whitehouse had his way,” Jones said, “Lois Lerner would just look like a test run of what Sheldon Whitehouse has in mind.”

In the Jan. 2021 letter, Whitehouse demanded that IRS Commissioner Charles Rettig revoke Turning Point USA’s non-profit status because members of the organization held an event at Donald Trump’s Mar-a-Lago estate where no one wore masks and did not engage in social distancing.

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