MONEY Kids and Money

Shark Tank for Kids: This Game Delivers the American Dream

A cattleman from Peoria, IL gets a second chance to show the Sharks what he's learned about his gourmet meat business since his Season 4 visit to the Tank.
Kelsey McNeal—ABC

Educators are using reality TV as a model for teaching kids about money. Here's why it works.

As part of his middle school history and civics classes, James Kindle incorporates a segment on money. He calls it Shark Tank after the popular TV show, and while the idea is to introduce personal financial concepts and entrepreneurship what Kindle believes he really teaches is how to achieve the American dream.

Just like the competitors in the TV show, Kindle’s students must come up with a business idea, write a proposal, and pitch the concept to teacher “investors.” He’s a pretty good pitchman himself. Bringing financial education alive through his Shark Tank program at Sullivan Community School in Minneapolis, Minn., earned Kindle first place in the PwC Financial Literacy Innovation Challenge and a $50,000 prize for his school.

“I want to give my students a taste of this dream, while teaching persuasive language, entrepreneurship, and financial literacy skills,” Kindle wrote in a request for funding. In an email, he added “while it might be awhile before my students are meeting with investors and venture capitalists to fund their business ideas, it won’t be long until they are presenting at science and history fairs, competing in speech and debate, or meeting with college admissions officers.” So his program teaches presentation skills, too.

As one of the judges in the PwC Charitable Foundation contest, I can say that what resonates in Kindle’s program is the game-based approach to a difficult subject, along with the infusion of popular culture to make the experience relevant. These were common traits of all top finishers. The results suggest to both parents and educators that they would do well to keep the principles of fun, hands-on, and timely instruction in mind when trying to teach young people about money.

Second place went to a history and civics class at Lawrence County High School in Moulton, Ala., where they play Biggest Loser, also modeled after a popular TV show. Students visit “exercise stations” where they choose a loan or credit card or make some other decision to help them lose “weight” (debt). Who knew reality TV could serve a purpose? Other finalist programs were organized around things like how much various careers pay, and everyday saving and spending decisions.

“Mr. Kindle’s Shark Tank lesson bases financial literacy around core values and behaviors versus facts and figures in order to teach skills like persuasion, negotiation and ownership,” says Shannon Schuyler, PwC corporate responsibility leader. “The idea was contagious, authentic and, most importantly, fun.”

Interestingly, this contest’s winners are taking bows even as educators around the country wrestle with the role of play in learning. With today’s focus on formal education, kids are being asked at earlier and earlier ages to put away the blocks and listen to their teachers lecture. Yet some researchers say this “head start” may backfire. Rebecca Marcon, a psychology professor at the University of North Florida, found that pre-school students allowed to learn through play earned significantly higher grades in the third and fourth grade. With financial education, especially, most experts agree that a game-based approach works best.

One study found that when good instruction is paired with high-quality digital games there is a 12% jump in cognitive learning outcomes. The game-oriented H&R Block Budget Challenge has produced evidence that this type of learning significantly improves financial know-how. Says Kindle: “Using games always increases student engagement. An activity that seems mind-numbingly boring, when slightly twisted into a game, suddenly becomes thrilling.”

Relevance and timeliness are also important. Modeling programs after Shark Tank and Biggest Loser gave students an instant touchstone. At home, parents trying to make a financial point might choose an opportune moment—perhaps when their teen is getting an iPhone upgrade, which means more to them than the incremental cost of your adjustable-rate mortgage as bond yields tick higher.

Understanding personal finance isn’t just a way to make ends meet. As the enterprising middle school teacher from Minneapolis might say, it’s how you achieve the American dream.

Read next: Kids and Money: The Search for What Really Works

MONEY 401(k)s

How the New-Model 401(k) Can Help Boost Your Retirement Savings

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Betsie Van Der Meer—Getty Images

As old-style pensions disappear, today's hands-off 401(k)s are starting to look more like them. And that's working for millennials.

If you want evidence that the 401(k) plan has been a failed experiment, consider how they’re starting to resemble the traditional pensions they’ve largely replaced. Plan by plan, employers are moving away from the do-it-yourself free-for-all of the early 401(k)s toward a focus on secure retirement income, with investment pros back in charge of making that happen.

We haven’t come full circle—and likely never will. The days of employer-funded, defined-benefit plans with guaranteed lifetime income will continue their three-decade fade to black. But the latest 401(k) plan innovations have all been geared at restoring the best of what traditional pensions offered.

Wall Street wizards are hard at work on the lifetime income question. Nearly all workers believe their 401(k) plan should have a guaranteed income option and three-in-four employers believe it is their responsibility to provide one, according to a BlackRock survey. So annuities are creeping into the investment mix, and plan sponsors are exploring ways to help workers seamlessly convert some 401(k) assets to an income stream upon retiring.

Meanwhile, like old-style pensions, today’s 401(k) plans are often a no-decision benefit with age-appropriate asset allocation and professionally managed investment diversification to get you to the promised land of retirement. Gone are confusing sign-up forms and weighty decisions about where to invest and how much to defer. Enrollment is automatic at a new job, where you may also automatically escalate contributions (unless you prefer to handle things yourself and opt out).

More than anything, the break-neck growth of target-date funds has brought about the change. Some $500 billion is invested in these funds, up from $71 billion a decade ago. Much of that money has poured in through 401(k) accounts, especially among our newest workers—millennials. They want to invest and generally know they don’t know how to go about it. Simplicity on this front appeals to them. Partly because of this appeal, 40% of millennials are saving a higher percentage of their income this year than they did last year—the highest rate of improvement of any generation, according to a T. Rowe Price study.

With a single target-date fund a saver can get an appropriate portfolio for their age, and it will adjust as they near retirement and may keep adjusting through retirement. About 70% of 401(k) plans offer target-date funds and 75% of plan participants invest in them, according to T. Rowe Price. The vast majority of investors in target-date funds have all their retirement assets in just one fund.

“This is a good thing,” says Jerome Clark, who oversees target funds for T. Rowe Price. Keeping it simple is what attracts workers and leads them to defer more pay. “Don’t worry about the other stuff,” Clark says. “We’ve got that. All you need do is focus on your savings rate.”

Even as 401(k) plans add features like auto enrollment and annuities to better replace traditional pensions, target-date funds are morphing too and speeding the makeover of the 401(k). These funds began life as simple balanced funds with a basic mix of stocks, bonds and cash. Since then, they have widened their mix to include alternative assets like gold and commodities.

The next wave of target-date funds will incorporate a small dose of illiquid assets like private equity, hedge funds, and currencies, Clark says. They will further diversify with complicated long-short strategies and merger arbitrage—thus looking even more like the portfolios that stand behind traditional pensions.

This is not to say that target-date funds are perfect. These funds invest robotically, based on your age not market conditions, so your fund might move money at an inopportune moment. Target-date funds may backfire on millennials, who have taken to them in the highest numbers. Because of their age, millennials have the greatest exposure to stocks in their target-date funds and yet this generation is most likely to tap their retirement savings in an emergency. What if that happens when stock prices are down? Among still more concerns, one size does not fit all when it comes to investing. You may still be working at age 65 while others are not. That calls for two different portfolios.

But the overriding issue is that Americans just don’t save enough and a reasonably inexpensive and relatively safe investment product that boosts savings must be seen as a positive. With far less income, millennials are stashing away about the same percentage of their earnings as Gen X and boomers, according to T. Rowe Price. That’s at least partly thanks to new-look 401(k)s and the target-date funds they offer.

Read next: 3 Ways to Build a $1 Million Nest Egg Despite Lower Investment Returns

MONEY Personal Finance

Oh No! Needing a Fridge, Rubio Raids Retirement Account

Larry Marano/Getty Images

Dipping into retirement savings to fund an everyday expense is a common but costly error.

If Florida Sen. Marco Rubio intends to lead by example, he’s off to a rocky start. The Republican presidential hopeful raided his retirement account last September, in part to buy a new refrigerator and air conditioner, according to a recent financial disclosure and comments on Fox News Sunday.

In liquidating his $68,000 American Bar Association retirement account, Rubio showed he’s no Mitt Romney, whose IRA valued at as much a $102 million set tongues wagging coast to coast during the last presidential cycle. Rubio clearly has more modest means, which is why—like most households—if he doesn’t already have an emergency fund equal to six months of fixed living expenses he should set one up right away.

He told Fox host Chris Wallace: “It was just one specific account that we wanted to have access to cash in the coming year, both because I’m running for president, but, also, you know, my refrigerator broke down. That was $3,000. I had to replace the air conditioning unit in our home.”

Millions of Americans treat their retirement savings the same way Rubio did in this instance, raiding a 401(k) or IRA when things get tight. Sometimes you have no other option. But most of the time this is a mistake. Cash-outs, early withdrawals, and plan loans that never get repaid reduce retirement wealth by an average of 25%, reports the Center for Retirement Research at Boston College. Money leaking out of retirement accounts in this manner totals as much as $70 billion a year, equal to nearly a quarter of annual contributions, according to a HelloWallet survey.

Rubio’s brush with financial stress from two failed appliances probably won’t set him too far back. He has federal and state retirement accounts and other savings. And let’s face it: The whole episode has an appealing and potentially vote-getting Everyman quality to it. Still, it is not a personal financial strategy you want to emulate.

 

 

MONEY Financial Education

The Surprising New Company Benefit That’s Helping Americans Retire Richer

chalkboard with graph showing increase in money over time
Oleg Prikhodko—Getty Images

Financial education at the office is booming—and none too soon.

Like it or not, the job of educating Americans about how to manage their money is falling to the corporations they work for—and new research suggests that many of those employers are responding.

Some 83% of companies feel a sense of responsibility for employees’ financial wellness, according to a Bank of America Merrill Lynch Workplace Benefits Report, which found the vast majority of large companies are investing in financial education programs. Among other things, companies are using the annual fall benefits re-enrollment period to talk about things like 401(k) deferral rates and asset allocation, and enjoying impressive results.

Workers are responding to other programs too. Another Merrill report found that retirement advice group sessions in the workplace rose 14% last year and that just about all of those sessions resulted in a positive outcome: employees enrolling in a 401(k) plan, increasing contributions, or signing up for more advice. Calls to employer-sponsored retirement education centers rose 17.6% and requests for one-on-one sessions more than doubled.

So a broad effort to educate Americans about money management is under way, including in government and schools—and none too soon. This year, Millennials became the largest share of the workforce. This is a huge generation coming of age with almost no social safety net. These 80 million strong must start saving early if they are going to retire. Given this generation’s love of mobile technology, it’s notable that Merrill found a 46% increase in visits to its mobile financial education platform. That means employers are reaching young workers, who as a group have shown enormous interest in saving.

“There is not a single good reason—none—that should prevent any American from gaining the knowledge and skills needed to build a healthy financial future,” writes Richard Cordray, director of the Consumer Financial Protection Bureau, in a guest blog for the Council for Economic Education. His agency and dozens of nonprofits are pushing for financial education in grades K-12 but have had limited success. Just 17 states require a student to pass a personal finance course to graduate high school.

That’s why it’s critical that corporations take up the battle. Even college graduates entering the workplace generally lack basic personal money management skills. This often translates into lost time and productivity among workers trying to stay afloat in their personal financial affairs. So companies helping employees with financial advice is self serving, as well as beneficial to employees. Some argue it helps the economy as a whole, too, as it lessens the likelihood of another financial crisis linked to poor individual money decisions.

 

 

 

 

MONEY Retirement

These Simple Moves By Your Employer Can Dramatically Improve Your Retirement

150512_RET_MillennialSaving
Sarina Finkelstein (photo illustration)—iStock (2)

Easy enrollment procedures and automatic escalation of contributions dramatically increase 401(k) participation rates and savings.

Nearly four decades into the 401(k) experiment, employers and policymakers may finally understand how to get the most from these retirement accounts—and it all boils down to a principle that Warren Buffett has long espoused: Keep it simple.

Nothing promotes participation and sound investment practices in 401(k) plans more than simple plan choices, according to a report from Bank of America Merrill Lynch. Last year, 79% of workers offered Express Enrollment in Merrill-administered plans followed through and began contributing to their plan. That compares to just 55% who enrolled after being offered a more traditional experience requiring choices about investment options and deferral amounts, Merrill found.

These findings jibe with other research that has found that inertia is most workers’ biggest obstacle to saving for retirement. A TIAA-CREF survey found that Americans spend more time choosing a flat-panel TV or a restaurant than they do setting up a retirement account. The Merrill report underscores the inertia factor, noting that, when considering how much of each paycheck to contribute, workers typically just choose the first rate listed.

Features like automatic enrollment and automatic escalation of contributions, with an opt-out provision, turn inertia into an asset. These features are now broadly employed and have greatly boosted both participation and deferral rates. Among companies with a 401(k) plan, 70% have some kind of auto feature, reports benefits consultant Aon Hewitt. Merrill found that plans with auto enrollment had 32% more participants, and those with an auto escalation feature had 46% more participants increasing their contributions.

Merrill oversees $138 billion in plan assets for 2.5 million participants and credits simplified enrollment for big gains in the number joining a plan or contributing more. The number of employers adopting Merrill’s simplified Express Enrollment more than doubled last year. Meanwhile, the number of participants raising their contribution rate jumped 18%.

A key feature of any simplified enrollment system is that workers are put into a diversified and age-appropriate target-date mutual fund, or some other option with similar characteristics, and that they begin deferring 5% or more of pay—generally enough to fully capture any employer match. Many employers also add auto escalation of contributions to keep up with raises and inflation—or to catch up if the initial deferral rate was lower. In many plans, the default rate is just 3% of pay.

Merrill found that 64% of employers now have plans with both auto enrollment and auto escalation. One in four employers who did not have both plan features in 2013 did last year.

Taking simplification further, more employers are now using the annual health benefits enrollment period to educate workers about 401(k) plans, Merrill found. As a result, twice as many workers enrolled in a plan or raised their contribution rate the second half of 2014 vs. the first half—a trend that Merrill says has been in place for several years.

 

 

 

 

MONEY Kids and Money

Why Mothers Know Best About Money

150507_FF_MomKnowsBest
Jamie Grill—Getty Images

Eight in 10 Americans say they learned something about money from Mom. That's good, because Dad may have been a tad overconfident.

Moms deserve a lot of credit for the things they teach kids about money, and with Mother’s Day this weekend what better time to celebrate their financial tutelage? More than eight in 10 Americans say they learned something about money from their mother, a new survey shows.

The chief overall lesson: live within your means. That motherly wisdom was cited by 55% in the survey from BeFrugal.com. The same percentage said she taught them the difference between a want and a need. Some 44% said Mom emphasized the importance of being self-sufficient. Mom also taught them how to shop wisely: 67% said she taught them about sales, and 57% said she taught them about coupons.

These findings jibe with other research on the subject. A few years ago, TD Bank found that in many families Dad doles out allowance and oversees big purchases, and that Dad tends to be the most confident about money and most interested in results. Meanwhile, Mom is most interested in the kids’ money learning process and the day-to-day aspects of financial management.

Mom’s softer approach to money lessons probably stems from motherly wisdom in many areas. Life lessons like “don’t be late” and “practice, practice, practice” and “don’t be afraid to ask for help” and many others have direct application to the money world. After all, it’s sage advice indeed to never make a late payment and to seek advice on complicated money matters.

Given the financial mistakes that many parents have made—poorly managing credit cards, for example—some argue that young adults would do better to skip parental advice altogether and find a financial adviser or third-party online advice. But the best advice is probably to listen to both Mom and Dad. They often see financial matters differently. That’s natural—opposites attract. And through discussion and compromise, your parents probably run the household finances better together than either one would alone.

That’s good since kids—and even young adults—seem to depend on both Mom and Dad for financial advice. Two surveys last fall, one by Fidelity Investments and the other by TIAA-CREF, show that Millennials seek out their parents more than anyone else for financial guidance. Fidelity identified parents as their top choice for trusted money advice. TIAA-CREF found that 47% view their parents as especially influential in money matters.

So here’s to all the moms out there, imparting financial wisdom in ways only they seem able—and for being an important counter balance to all the fathers with misplaced confidence in their own money skills. Several studies have shown that women make better investors. But let’s give a nod to dads too. Embracing risk and a focus on results have their place, and the balance that both parents produce may be the best lesson of all.

Read next: What Dads Can Do to Really Help Mom This Mother’s Day

MONEY 401(k)s

1 in 3 Older Workers Likely to Be Poor or Near Poor in Retirement

businessman reduced to begging
Eric Hood—iStock

Fewer Americans have access to a retirement plan at work. If you're one of them, here's what you can do.

A third of U.S. workers nearing retirement are destined to live in or near poverty after leaving their jobs, new research shows. One underlying cause: a sharp decline in employer-sponsored retirement plans over the past 15 years.

Just 53% of workers aged 25-64 had access to an employer-sponsored retirement savings plan in 2011, down from 61% in 1999, according to a report from Teresa Ghilarducci, professor of economics at the New School. More recent data was not available, but the downward trend has likely continued, the report finds.

This data includes both traditional pensions and 401(k)-like plans. So the falloff in access to a retirement plan is not simply the result of disappearing defined-benefit plans, though that trend remains firmly entrenched. Just 16% of workers with an employer-sponsored plan have a traditional pension as their primary retirement plan, vs. 63% with a 401(k) plan, Ghilarducci found.

Workers with access to an employer-sponsored plan are most likely to be prepared for retirement, other research shows. So the falling rate of those with access is a big deal. In 2011, 68% of the working-age U.S. population did not participate in an employer-sponsored retirement plan. The reasons ranged from not being eligible to not having a job to choosing to opt out, according to Ghilarducci’s research.

She reports that the median household net worth of couples aged 55-64 is just $325,300 and that 55% of these households will have to subsist almost entirely on Social Security benefits in retirement. The Center for Retirement Research at Boston College and the National Institute on Retirement Security, among others, have also found persistent gaps in retirement readiness. Now we see where insufficient savings and the erosion of employer-based plans is leading—poverty-level retirements for a good chunk of the population.

At the policy level, we need to encourage more employers to offer a retirement plan. On an individual level, you can fix the problem with some discipline. Even those aged 50 and older have time to change the equation by spending less, taking advantage of tax-deferred catch-up savings limits in an IRA or 401(k), and planning to stay on the job a few years longer. That may sound like tough medicine, but it’s nothing next to struggling financially throughout your retirement.

MONEY Financial Education

Kids and Money: The Search for What Really Works

piggy banks with chalkboard saying "savings 101"
Getty Images

A new study aims to understand the effectiveness of the money lessons kids learn in school.

Those who oppose integrating financial education into our nation’s classrooms have long argued money lessons don’t actually change behavior. Slowly, evidence to the contrary is emerging. But much more proof is needed before personal finance will be taken as seriously as math, science, or history.

That line of thinking underlies a new $30 million commitment from professional services firm PwC, which in 2012 launched its Earn Your Future program, designed to help educators gain the tools and knowledge they need in order to teach kids about money. PwC pledged $100 million worth of service hours from its employees and $60 million in cash over five years.

This new commitment is all cash, and a good chunk of it takes aim at a research void: finding what teaching methods and strategies result in lasting behavior change among students who study personal finance. PwC has teamed with two major universities to analyze financial education programs in grade schools and colleges with the goal of understanding how students learn and apply money lessons.

“Financial capability techniques are still evolving,” says Shannon Schuyler, corporate responsibility leader at PwC. “We need to make sure that as we are implementing them into classrooms, we are measuring their effectiveness and adjusting our strategy and approach based on the findings from sound research.”

Critics say this may all be a waste of resources. They argue that marketing messages overwhelm the common sense you might learn as a young student, and that the financial landscape changes so fast that anything you learn about, say, bank fees and cell phone packages quickly becomes obsolete.

Such issues have been studied for years. We have a global library of some 1,400 papers on the subject. But only recently has this research begun to hone in on what really works. In a groundbreaking study in February, researchers at the University of Wisconsin Center for Financial Security tied personal finance lessons in school to higher credit scores among young adults. Other recent research sponsored by H&R Block found remarkable attitude changes in students following a nine-week personal finance course, including that 92% said learning about money management was very important and 80% wanted to learn more.

The new PwC commitment will also fund research into how iPads and other mobile technologies can speed learning of financial concepts—even as the firm sets aside more funds for good old-fashioned learning from print. A colorful six-page magazine through Time for Kids, Your $, spotlights financial literacy for kids. The print version is being distributed in New York schools and will roll out in Chicago this month. It is also available online.

Policymakers in the U.S. and around the world are embracing financial education as a way to help prevent or minimize the effects of another financial crisis. In the U.S., the Obama administration has made its priorities clear—it wants clean data that can be analyzed and used to find proof of financial education strategies that work. We seem to be moving that direction.

MONEY

The 5 Numbers You Need to Know to Get a Handle on Your Money

If they mean nothing to you, it's time to get better acquainted with your money

Do you really know your money? You would be surprised how many people don’t know anything about their all-important relationship with their finances. You may think you’re pretty financially savvy, but if you can’t answer these five questions you may need to get better acquainted with your money.

1. Monthly Income

This may seem very basic, but more often than not people can’t answer how much money comes into their home. That means knowing the gross and net income. Almost everyone knows what their salary is, roughly, but when it comes to pre- and post-tax income per month, many people have no clue. Look at your next paystub and take note of both your gross (pretax) and net (post-tax and other deductions) pay. This knowledge really comes in handy when putting together your budget.

2. Monthly Expenses

This one goes hand-in-hand with knowing your monthly income. While knowing how much you have coming in each month is important, it’s equally important to know how much you have going out. Get a grip on your expenses. Take the time to write down everything you spend your money on in a given month. You’d be surprised what expenses you have over and above your rent/mortgage, car, utility and insurance payments. An understanding of your expenses can help you identify areas where you’re overspending and can reveal new ways for you to save. If you want to have a well thought out and effective budget, knowing both your income and expenses is pivotal. Without this knowledge, you won’t know what you can (and can’t) afford and you could easily spend beyond your means.

3. Net Worth

You may think that a ‘net worth’ is only for wealthy people. Not so fast: Net worth, simply put, is the difference between what you own and what you owe. This begins with your bank account, income and expenses. Assets such as investments, cars and real estate all factor in to your net worth as well. Knowing your net worth provides you with a straightforward financial snapshot. If your number is positive, you can give yourself a pat on the back. If it’s negative, you might want to take a closer look at your finances so you can diagnose the problem, and create a plan to get you into the positive.

4. Debt-to-Income Ratio

While your net worth compares all of your assets to what you owe, a debt-to-income ratio shows you specifically how much debt you have compared to how much money you’re making. The first step to figuring this out is to pull up your credit report (to get the most accurate estimate pull it from all three bureaus, in case there is a debt that is reported to one and not the others; also make sure there are no errors in how your debts are reported). Once you’ve checked your free annual credit reports, you can monitor for changes to your credit reports every month by getting a free credit report summary on Credit.com. Tally up your monthly debt payments, and divide them by your gross monthly income (money before taxes and other deductions). As you could have guessed, the lower this number is the better off you’ll be. Ideally you want to keep that number below 35%.

5. Your Invested Income

You may know the number in your savings account, (this is invested income, too, despite the small return) — but do you know if you’re making the most of your money? Ask yourself what your money is doing for you. Is it sitting in the bank to use for a rainy day, or is it working to make you more money? Work with a trusted adviser to come up with a plan. Even if you’re just starting out with your first job, wrangle your money and make it start working for you. If you already have some investments, ask yourself if you know what the money is invested in, not just the old, “oh, it’s in an IRA.” Know who manages it, what you earn, what the money is invested in and what kind of returns you get. The younger you are, the more freedom you have to make that young money work hard to earn you the most possible future money.

Finally, your money should be in line with your future goals. Know what those goals are and the compatibility with your money. Saving money alone is not enough when it comes to having good financial health. You have to make sure you’re paying attention to what amount of your savings is for what, and whether you’re not on track for the big things.

When it comes to managing your money, it’s easy to get overwhelmed if you don’t really know your money. Between knowing all the terms and numbers, you can quickly lose track and get discouraged. However, if you take the time get to know your money and how it impacts your life, it’ll be easy to see that financial health comes down to being in the know. So the next time you want to have a close relationship with your money situation, take a deep breath, and jump in as if you were interviewing your money for a job … to work for you.

More from Credit.com:

This article originally appeared at Credit.com.

 

TIME Taxes

Here’s How Unlikely It Is the IRS Will Actually Audit You

But fines and jail time still await tax frauds

Here’s something the IRS probably doesn’t want you to know: Our entire tax code mostly works on the honor system. The much-feared agency only audited 0.86% of individual tax returns in 2014, the lowest percentage since 2004, Bloomberg reports. Among households with incomes greater than $1 million, 7.5% were audited.

The auditing rate is falling because the IRS is bleeding employees. By 2014, the number of revenue agents had declined 16% from its 2010 peak, to 11,629. It’s a trend that IRS Commissioner John Koskinen called “deeply disturbing” in a Tuesday speech.

At its peak efficiency, the IRS was auditing about 1.11% of individual returns back in 2011. Even if those figures seem small, getting caught committing tax fraud can result in heavy fines or jail time—which seems to be enough to keep most citizens honest.

[Bloomberg]

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