The IRS is barely auditing anymore

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The government’s gimme-money department has shrunk so much that it’s struggling to get up and work. IRS audits are at a record low and could plunge even further following President Trump’s cuts, the New York Times reported yesterday. According to NYT’s analysis of federal data: Audit rates for personal income taxes fell from ~1% (about 1 in every 100 tax returns) in 2010 to just 0.36% in 2023 (roughly 1 in 300). The audit rate fell below 0.5% in 2020 for the first time on record. The IRS has collected only $4.5 billion from 2019 personal audits so far, down from $11 billion from audits of 2010 returns—and there have been “steep declines” in corporate audits, too. Why? The IRS cut more than 20% of its 95,000-person workforce between 2010 and 2019, leaving burdened workers with less room for time-consuming high-income audits, which can recoup $100,000+ from a single flawed tax return. Auditing could get worse: DOGE is planning on cutting 18,000+ IRS workers, which would cost the government $6.8 billion in lost tax revenue next year, according to Yale’s nonpartisan Budget Lab. As many as 5,000 IRS employees have already accepted buyouts. Also…the White House announced yesterday that the IRS will start sharing undocumented taxpayers’ information with ICE, which reportedly could violate federal privacy laws. DOGE is also seeking to widen access to taxpayer info, Wired reported this weekend.—ML