IRS audit

The IRS will be hiring enough new agents to bring the auditing level up to where it was 10 years ago. The administration says the new audits will be on rich people and that may be true but it is not true today. Poor taxpayers, or those earning less than $25,000 annually, have an audit rate of 0.69% — more than 50% higher than the overall audit rate. It also means low-income taxpayers are more likely to get audited than any other group, except Americans with incomes of more than $500,000. In Fiscal Year 2021, the IRS closed 738,959 audits and collected $26 billion in extra tax. They average about 300,000 audits each year for earned income tax credits (EITC). These are mostly people who earn less than $50,000 and are claiming children they don't have. In other words 40% of audits are on poor people.