If you’re worried abut your return getting a second look from the IRS, relax.
The IRS audited only 0.84% of taxpayers in 2015, the lowest level since 2004, and the agency is on track to audit even fewer people this year.
Despite receiving a $290 million budget increase—the first significant increase approved by Congress in six years—IRS Commissioner John Koskinen says the agency won’t be able to replace hundreds of tax-compliance employees expected to retire this year, according to a media briefing reported by USAToday.
That’s because the majority of the increased budget has been earmarked for taxpayer assistance, including hiring up to 1,000 additional customer service representatives to cut down phone waits for answers to tax questions and reduce the number of “courtesy disconnects” by an overloaded IRS switchboard. Tax-refund fraud and cybersecurity are the other areas the agency plans to address with the additional funds.
The lack of increased funding to the agency’s tax compliance and enforcement branch means that the IRS has 25% fewer auditors than it had in 2010, and that revenue from audits has declined 41% to $7.3 billion, the lowest amount since 2002, according to agency data.
With such limited resources, the agency tends to concentrate most of its enforcement energy on the areas where it typically sees noncompliance and stands the best chance of collecting: high-income households.
Millionaire earners were about 12 times more likely to face an audit than the average taxpayer, according to new data released by the agency. In 2015, the IRS audited nearly 1 in 10, or 9.55%, of returns filed with incomes of $1 million or more, up from 7.5% in 2014.
If you, like 95% of American taxpayers, earn $200,000 or less, your chances of being audited are even smaller then that national average of 0.84%. Last year, only 0.76% of these Americans were audited.
Below is the IRS’s most recent audit breakdown by income. All percentages reflect the number of taxpayer audits for fiscal year 2015.
|Returns by Income||Percent audited in 2015|
|$200,000 and higher||2.61%|
|$1 million and higher||9.55%|