More than twenty years ago, the TRAC similarly reported that “low-income taxpayers are now more likely to be audited than higher-income taxpayers. Collins noted in his most recent report, last year only 11% of people who called the IRS helpline contacted a customer service representative. They are the least likely to have professional tax advice and are most likely to have a limited education or that English is not their native language. The corrosive effect of the financial and political situation in the United States caused by an increasingly dysfunctional and unfair IRS cannot be underestimated.
Keep this in mind the next time you hear billionaires complaining that they are being required to pay their fair share of taxes. The IRS has also seen its staffing levels fall to the same levels as in 1973, despite having millions more returns to process and additional mandates to fulfill. The decline in funding and auditors means that taxpayers, and especially those who earn the most, are much less likely to be caught paying less in taxes than they were a decade ago. For now, according to the IRS, while it agrees that auditing the wealthiest taxpayers would be a good idea, without adequate funding there's nothing you can do.
The result is that “auditing rates have fallen in all areas, but they have fallen more in the last decade for people with high incomes than for beneficiaries of the earned income tax credit.” One of them is that it is more difficult to recruit and train tax agents, the most qualified category of police personnel needed to audit the complex statements of the rich, than it is for tax examiners, who can deal with more routine issues. For more perspective, consider that the entire tax gap is equivalent to the income tax owed by the poorest 90% of Americans. Up to 14% of low-income taxpayers may not have responded because they didn't know they had been audited, Collins reported. Most of that money is owed by the richest people in the country, but the IRS isn't trying to collect it.
Conversely, if you're called in for a field audit, the IRS doesn't normally accept any answers and will work hard to find you. While protesting against taxes is a common battle cry for congressional Republicans, their history and actions make it clear that they are only interested in making sure that the richest people pay less. In response to Rettig's letter, Wyden agreed in a statement that the IRS needs more money, “but that doesn't eliminate the need for the agency to begin reversing the alarming trend of plummeting the audit rates of the rich within its current budget.
