Too Taxing: IRS Audits Plummet


Uncle Sam isn't checking up on taxpayers like he used to. With many folks anxious to start filing tax returns again, it's highly unlikely they'll hear directly from the IRS. According to a Wall Street Journal report, IRS audits fell for the eighth straight year in 2019, to their lowest level in decades. Just 0.45% of taxpayers were audited last year, which equals 1 in every 220. That's down more than 50% since 2010.

The IRS has undergone a lot of changes in the past decade, which have contributed to the steady decline in audits. "Some of the long-tenured staff that was at the IRS have all retired," says Randy Reimer, Houston-based CPA. "And for the most part because of budget cuts, and just all the negativity around the IRS, they have not replaced those folks."

Additionally, the IRS no longer needs to do as many audits as in previous decades. "There's no doubt that technology and the advent of Turbo Tax, and all of this tax software that most returns are done on now...they catch most errors," says Reimer.

Turbo Tax or not, there are still plenty of tax cheats out there---the IRS reports it identified $1.8 billion in tax fraud last year. Reimer says that number would likely be much higher if there were more audits. "I do think this probably does lead some of those types of people who would cheat on their taxes to say hey, if the odds of getting caught are that low, I'll take my chances," he says.

Still, just because audits are down doesn't mean they've gone away altogether. There are many people who may get that dreaded visit from Uncle Sam. "The more money you make, the more likelihood you have of being audited," says Reimer. "They're especially really good at catching large fluctuations...if you had a huge loss in one year and huge income the next year, you definitely are red-flagged."


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