Audits

The IRS has received $80 billion dollars and some of this money will be used to hire new auditors but most of it will be used to hire new employees and upgrade computer systems. The big accounting firms are having a difficult time finding auditors so it will not be an easy task for the IRS. In addition training an auditor to handle low and middle income returns is relatively easy but handling the returns of wealthy people takes a lot more training. The most likely group to be audited are the 25 million people who claim the EITC. These are easy audits mostly on people who earn less than $20,000 per year and many times can be done by mail. Most people collecting EITC do not earn enough to owe taxes but they get an average credit of $2,000. The cheating happens when people claim children they do not have. They use false social security numbers. Most wealthy people have trained accountants to do their taxes and to audit these accounts takes special training and a lot of time. If you are a millionaire your chance of being audited is 2.3 out of a thousand but if you are a low wage earner claiming the EITC your chances of being audited are 13 out of a thousand.