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 itโs 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/
๐๐ก๐จ๐ฆ๐๐ฌ ๐๐๐ฆ๐๐ฌ ๐๐๐ซ๐ซ๐จ๐ฅ๐ฅ, ๐.๐. ๐ข๐ฌ ๐ ๐ฅ๐๐ฐ ๐๐ข๐ซ๐ฆ ๐๐จ๐๐ฎ๐ฌ๐ข๐ง๐ ๐จ๐ง ๐๐๐๐๐ซ๐๐ฅ ๐๐ง๐ ๐ฌ๐ญ๐๐ญ๐ ๐ญ๐๐ฑ๐๐ฌ ๐ญ๐ก๐๐ญ ๐ฉ๐ซ๐จ๐ฏ๐ข๐๐๐ฌ ๐ข๐ง๐๐ข๐ฏ๐ข๐๐ฎ๐๐ฅ๐ฌ ๐๐ง๐ ๐๐ฎ๐ฌ๐ข๐ง๐๐ฌ๐ฌ๐๐ฌ ๐ฐ๐ข๐ญ๐ก ๐ญ๐๐ฑ ๐ก๐๐ฅ๐ฉ ๐๐ง๐ ๐ฌ๐จ๐ฅ๐ฎ๐ญ๐ข๐จ๐ง๐ฌ ๐๐จ๐ซ ๐ญ๐จ๐๐๐ฒ ๐๐ง๐ ๐ญ๐จ๐ฆ๐จ๐ซ๐ซ๐จ๐ฐ.
๐๐ฏ๐๐ซ ๐๐ ๐๐๐๐ซ๐ฌ ๐จ๐ ๐๐ฑ๐ฉ๐๐ซ๐ข๐๐ง๐๐ ๐ข๐ง ๐๐๐, ๐๐ & ๐๐ ๐๐๐ฑ ๐๐ฎ๐๐ข๐ญ๐ฌ, ๐๐ฉ๐ฉ๐๐๐ฅ๐ฌ & ๐๐๐ฑ ๐๐ฅ๐๐ง๐ง๐ข๐ง๐ .
๐๐๐.๐๐๐๐๐๐๐๐๐-๐๐๐.๐๐๐