๐ˆ๐‘๐’ ๐€๐”๐ƒ๐ˆ๐“ ๐‘๐€๐“๐„ & ๐๐”๐Œ๐๐„๐‘๐’ ๐…๐€๐‹๐‹๐ˆ๐๐† ๐Ÿ๐จ๐ซ ๐ˆ๐๐ƒ๐ˆ๐•๐ˆ๐ƒ๐”๐€๐‹๐’ (๐Ÿ๐Ÿ/๐Ÿ๐Ÿ”/๐Ÿ๐ŸŽ๐Ÿ๐ŸŽ)

Table 17a of the IRS 2019 Data Book (fiscal year October 1, 2018 to September 30, 2019) gives us statistical insights into IRS audit activities for a number of years. It classifies individual returns by income level and details returns filed, examined and the examination percentage. Two quick longitudinal analyses reveal that from 2013 to 2015 examination rates and numbers generally fell across the years in income classifications with a few exceptions. But from 2016 to 2018, examination rates and numbers fell across the years in income classifications significantly without exception.

ANALYSIS 1-EXAMINATION RATES (Percentage Covered column in Table 17a)

ANALYSIS 1 2018 2017 2016 2015 2014 2013
TABLE 17a-Examination Coverage Percentage by Return Size (Individual) Percentage Covered Percentage Covered Percentage Covered Percentage Covered Percentage Covered Percentage Covered
Individual Income Tax Returns, Total 0.15 0.33 0.46 0.57 0.58 0.64
No Total Positive Income 0.31 1.11 2.98 4.47 7.52 12.68
$1 under $25,000 0.28 0.53 0.64 0.66 0.71 0.83
$25,000 under $50,000 0.13 0.21 0.36 0.40 0.42 0.35
$50,000 under $75,000 0.08 0.18 0.33 0.53 0.42 0.33
$75,000 under $100,000 0.06 0.22 0.37 0.49 0.38 0.41
$100,000 under $200,000 0.05 0.25 0.43 0.47 0.40 0.52
$200,000 under $500,000 0.03 0.25 0.51 0.55 0.56 0.83
$500,000 under $1,000,000 0.03 0.51 1.08 1.13 1.14 1.48
$1,000,000 under $5,000,000 0.05 0.96 2.12 2.39 2.65 3.15
$5,000,000 under $10,000,000 0.04 1.48 3.91 4.39 5.24 6.40
$10,000,000 or more 0.03 2.6 6.49 8.16 8.67 12.06

These numbers represent total returns (closed and in-process) examined for each income classification as a percentage of the total number of returns filed for the tax year for that classification.

ANALYSIS 1 reveals that from 2013 to 2015, examination rates generally fell across the years in income classifications with the exceptions highlighted in red.

From 2016 to 2018, ANALYSIS 1 reveals that examination rates fell significantly across the years in income classifications without exception.

ANALYSISย  2-EXAMINATION NUMBERS (Closed and In Process columns in Table 17a)

ANALYSIS 2 2018 2017* 2016* 2015* 2014* 2013*
TABLE 17a-Returns Examined by Return Size (Individual) Returns Examined Returns Examined Returns Examined Returns Examined Returns Examined Returns Examined
Individual Income Tax Returns, Total 226,613 507,782 741,695 851,039 848,682 938,120
No Total Positive Income 1,998 7,744 20,413 31,329 49,829 78,573
$1 under $25,000 137,429 277,593 338,404 357,410 390,799 464,856
$25,000 under $50,000 47,720 74,364 129,910 141,727 147,805 121,841
$50,000 under $75,000 16,501 37,641 67,646 108,219 82,822 63,700
$75,000 under $100,000 8,627 29,580 48,591 64,324 49,717 52,852
$100,000 under $200,000 11,297 52,708 84,387 92,124 73,729 90,236
$200,000 under $500,000 2,376 16,832 30,672 31,804 29,884 40,290
$500,000 under $1,000,000 400 5,635 10,562 10,898 10,362 11,802
$1,000,000 under $5,000,000 243 4,601 8,844 10,244 10,651 10,782
$5,000,000 under $10,000,000 15 510 1,129 1,367 1,512 1,499
$10,000,000 or more 7 574 1,137 1,593 1,572 1,689

These numbers ย include ย examinations that were closed as of the end of the September 30 year. It also includes examinations that were in an open examination status.

In the 2018 Table 17a, both Closed and In Process numbers are presented as a total in one column so itโ€™s easy to trace.

* In 2013 to 2017 Table 17a, Closed and In Process numbers appear in separate columns and were added together for the analysis. They can be traced by adding the two columns together.

ANALYSIS 2 reveals that from 2013 to 2015, examination numbers went up in a few classifications in 2014. And examination numbers went up in a majority of classification in 2015. Increases are highlighted in red.

From 2016 to 2018, ANALYSIS 2 reveals that examination numbers fell significantly across the years in income classifications without exception.

Both ANALYSES 1 & 2 for 2018 reveal that the lower end of the income classifications suffered greater audits.

SO, what happened from 2016 to 2018?

For the IRS 2019 Data Book, see https://www.irs.gov/pub/irs-pdf/p55b.pdf

 

If you need help, contact us at https://tjcarroll-law.com/contact/

 

๐“๐ก๐จ๐ฆ๐š๐ฌ ๐‰๐š๐ฆ๐ž๐ฌ ๐‚๐š๐ซ๐ซ๐จ๐ฅ๐ฅ, ๐.๐‚. ๐ข๐ฌ ๐š ๐ฅ๐š๐ฐ ๐Ÿ๐ข๐ซ๐ฆ ๐Ÿ๐จ๐œ๐ฎ๐ฌ๐ข๐ง๐  ๐จ๐ง ๐Ÿ๐ž๐๐ž๐ซ๐š๐ฅ ๐š๐ง๐ ๐ฌ๐ญ๐š๐ญ๐ž ๐ญ๐š๐ฑ๐ž๐ฌ ๐ญ๐ก๐š๐ญ ๐ฉ๐ซ๐จ๐ฏ๐ข๐๐ž๐ฌ ๐ข๐ง๐๐ข๐ฏ๐ข๐๐ฎ๐š๐ฅ๐ฌ ๐š๐ง๐ ๐›๐ฎ๐ฌ๐ข๐ง๐ž๐ฌ๐ฌ๐ž๐ฌ ๐ฐ๐ข๐ญ๐ก ๐ญ๐š๐ฑ ๐ก๐ž๐ฅ๐ฉ ๐š๐ง๐ ๐ฌ๐จ๐ฅ๐ฎ๐ญ๐ข๐จ๐ง๐ฌ ๐Ÿ๐จ๐ซ ๐ญ๐จ๐๐š๐ฒ ๐š๐ง๐ ๐ญ๐จ๐ฆ๐จ๐ซ๐ซ๐จ๐ฐ.

๐Ž๐ฏ๐ž๐ซ ๐Ÿ‘๐Ÿ“ ๐˜๐ž๐š๐ซ๐ฌ ๐จ๐Ÿ ๐„๐ฑ๐ฉ๐ž๐ซ๐ข๐ž๐ง๐œ๐ž ๐ข๐ง ๐ˆ๐‘๐’, ๐๐˜ & ๐๐‰ ๐“๐š๐ฑ ๐€๐ฎ๐๐ข๐ญ๐ฌ, ๐€๐ฉ๐ฉ๐ž๐š๐ฅ๐ฌ & ๐“๐š๐ฑ ๐๐ฅ๐š๐ง๐ง๐ข๐ง๐ .

๐–๐–๐–.๐“๐‰๐‚๐€๐‘๐‘๐Ž๐‹๐‹-๐‹๐€๐–.๐‚๐Ž๐Œ