According to a study detailing federal data, the IRS is targeting low-wage and middle class Americans with audits, while workers earning a million or more yearly are investigated at a lower rate.
According to statistics provided by Syracuse University’s Transactional Records Access Clearinghouse (TRAC), the chances of the IRS auditing millionaires in the conventional manner carried out by tax auditors or revenue agents were just 1.1 percent.
Based on the IRS audit rate, just one out of every hundred millionaires in the U.S. was audited by tax auditors or revenue agents in Fiscal Year 2022. Even when letters issued by the IRS requesting further financial evidence are included, millionaires were only audited at a rate of 2.4 percent last year.
Last year, an estimated 700,000 millionaires were not investigated by the IRS.
Meanwhile, the IRS audit rate for Americans earning less than $25,000 per year was 1.27 percent. Revenue agents or tax auditors conducted about 8,900 audits on working-class earners, which is less than the roughly 8,700 audits done on millionaires in Fiscal Year 2022.
The TRAC study states:
“As previously noted, millionaires have the highest chances of getting audited. However, if one disregards the fantasy of auditing a billionaire by just mailing a letter, the odds that millionaires receiving a standard audit by an agent (1.1%) were actually smaller than the audit rates of the targeted lower income wage-earners, which was 1.27 percent!”
Similarly, upper-middle-class and lower-class Americans earning between $25,000 and $200,000 received over 63,000 IRS audits through tax auditors or revenue agents last year, with over 187,000 audits done via correspondence letters.
In other words, the IRS audited 1.9 out of every 1,000 middle-class Americans last year, a higher audit rate than millionaires when correspondence audits are omitted.
The report comes as Dems and President Joe Biden pushed through legislation last year to extract $20 billion from largely middle and working-class Americans via increased IRS audits.
An estimated 78 to 90 percent of the funds raised by these new IRS investigations and audits will come from American families earning under $200,000 per year. Meanwhile, only four to nine percent are predicted to come from families earning over $500,000 each year.
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