The IRS release of the 2019 Data Book (fiscal year October 1, 2018 to September 30, 2019) gives us statistical insights into IRS activities for the period. Most interesting is audit statistics as they reveal what income levels are being audited. Normally, we could compare it to the previous year’s Data Book and see what changed. But this year there has been some format changes.
What changed? The table dealing with audit rates statistics stratified by income changed. 2018’s Table 9b was replaced with 2019’s Table 17a. And the 2019 Table 17a only covers tax year 2018 leaving out the first nine months of 2019.
Comparing 2018 to 2019 reveals that the audit rates in 2019’s Table 17a are significantly smaller than 2018’s Table 9b even given the loss of nine months. The new rates are tiny. The high rate is .6 % for returns with the earned income tax credit on it. And the low rate is .03% for those with income of $10,000,000 or more. With regard to other income ranges, generally the higher the income the lower the audit rate.
It’s surprising and disturbing. Surprising that audit rates are so low as to render enforcement inconsequential. And disturbing that the least capable members of society bear the burden of enforcement.
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