IRS: Sorry, but It’s Just Easier and Cheaper to Audit the Poor
Congress asked the IRS to report on why it audits the poor more than the affluent. Its response is that it doesn’t have enough money and people to audit the wealthy properly. So it’s not going to.by Paul Kiel Oct. 2, 2:47 p.m. EDTIRS Commissioner Charles Rettig at the Capitol on May 15, 2019, in Washington. Rettig says increasing audit rates of the wealthy depends on whether the IRS budget grows. (Anna Moneymaker/Getty Images)TRUMP ADMINISTRATIONThe 45th President and His AdministrationGUTTING THE IRSWho Wins When a Crucial Agency Is DefundedProPublica is a nonprofit newsroom that investigates abuses of power. Sign up for ProPublica’s Big Story newsletter to receive stories like this one in your inbox as soon as they are published.The IRS audits the working poor at about the same rate as the wealthiest 1%. Now, in response to questions from a U.S. senator, the IRS has acknowledged that’s true but professes it can’t change anything unless it is given more money.ProPublica reported the disproportionate audit focus on lower-income families in April.
Lawmakers confronted IRS Commissioner Charles Rettig about the emphasis, citing our stories, and Sen. Ron Wyden, D-Ore., asked Rettig for a plan to fix the imbalance. Rettig readily agreed.Last month, Rettig replied with a report, but it said the IRS has no plan and won’t have one until Congress agrees to restore the funding it slashed from the agency over the past nine years — something lawmakers have shown little inclination to do.On the one hand, the IRS said, auditing poor taxpayers is a lot easier: The agency uses relatively low-level employees to audit returns for low-income taxpayers who claim the earned income tax credit. The audits — of which there were about 380,000 last year, accounting for 39% of the total the IRS conducted — are done by mail and don’t take too much staff time, either. They are “the most efficient use of available IRS examination resources,” Rettig’s report says.