IRS Seeks To Bring Audit Rates Back Up For Wealthy Taxpayers And Corporations

The Internal Revenue Service (IRS) has announced plans to significantly increase audit rates for wealthy taxpayers and large corporations, with the goal of bringing “coverage rates” back to levels seen more than a decade ago before underfunding and declining staff counts.

According to an IRS report released Thursday, the agency aims to achieve a 50% jump in the audit rate for households with incomes of $10 million and above by the time people file their 2026 taxes, while also seeking to nearly triple the rate of corporate audits.

IRS Commissioner Danny Werfel emphasized that there are no plans to increase audits on households making less than $400,000, stating that audit rates for this group “remain at historically low levels.” The focus, he explained, is on the top of the income distribution.

The IRS’s plans are part of an ongoing effort to demonstrate how it intends to maximize the billions of dollars provided by the Inflation Reduction Act, passed in 2022 by a Democrat-controlled Congress. The agency is also highlighting its efforts as it makes the case for stable long-term funding levels, including through funding proposed in President Joe Biden’s 2025 budget.

Werfel noted that the IRS now has approximately 90,000 full-time employees, up from around 79,000 in fiscal year 2022, with an end goal of around 102,500 employees by the end of the decade, which he believes represents a “right-sized IRS” and should “lay to rest any lingering myth about a supersized IRS.”

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