Watchdog: IRS should spend less time auditing rich, more time on super-rich
Key Excerpts from Article on Website of USA Today
Posted: November 30th, 2015
Every hour spent auditing a taxpayer with more than $5 million in income nets the government $4,545, the Treasury Inspector General for Tax Administration found in a report released Friday. Auditing taxpayers in the $200,000 to $399,999 income bracket was less fruitful, generating just $605 in revenue per audit-hour. And yet the IRS spent more than four times as many hours examining taxpayers in the $200,000 to $399,999 income bracket than the $5 million-plus. That's especially important as congressional budget cuts have forced the IRS to pare back its taxpayer audits. The percentage of individual taxpayers audited each year has reached the lowest point in a decade, and is now just 0.84%. The highest-income taxpayers have seen the biggest decline in audit rates. In 2011, 30% of tax returns from taxpayers making more than $10 million got a second look by the IRS. In 2014, it was just 16%. The IRS already gives special attention to tax returns with an income above $200,000. But the inspector general recommends that the IRS increase that threshold. The agency will consider changing those thresholds, said Douglas O'Donnell, the commissioner of the IRS's Large Business and International Division. But he also said the IRS does not target groups of taxpayers based just on how much revenue an audit will generate.
Note: In the US in recent years, the super-rich have been taxed less and less while companies like General Electric sometimes pay no taxes at all. For more along these lines, see concise summaries of deeply revealing news articles on income inequality and government corruption news articles.