While the wealthiest Americans already shoulder 68 percent of the tax burden, a new report released by the nonpartisan Government Accountability Office (GAO) suggests that the IRS should audit them more.
Yet the IRS already audits wealthier Americans at a much higher rate.
“People who earn more than $1 million a year are more than 12 times more likely to be audited than people who earn $200,000 or less,” CNBC reports, while “[a]bout one of every eight tax filers making $1 million or more were audited in 2011 — double the rate of 2009.”
Of filers with incomes greater than $1 million, the IRS generated $47.20 for every dollar it cost the IRS to audit, despite those audits being more complicated. Lower-income earner examinations returned only between $5.40 to $7.40 for every dollar spent by the IRS.
“The results of our analyses suggest that there is potential for IRS to increase the direct revenue yield of selected enforcement programs by hundreds of millions of dollars per year without significant (if any) adverse effect on the indirect effect that examinations have on revenues,” the report said.
The GAO estimates that the differential between taxes owed and taxes paid on time could be lowered by at least $1 billion by spending $124 million more on audits of higher earners. While that might sound like a big expense, “it’s less than 8 percent of the $1.6 billion the IRS spent on examinations over two years,” CNBC notes.
“IRS is committed to the optimal allocation of our enforcement resources; that is why we select workload strategically,” James R. White, the IRS director of Tax Issues, said in a letter.
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