Comprehensive Tax & Legal Solutions

IRS audit rate is the lowest since 2004

On Behalf of | Nov 11, 2015 | Tax Law

The IRS audited the income tax returns of slightly more than 1.2 million people during the last fiscal year. That may sound like a lot of audits, but it is actually the fewest the IRS has pursued in 11 years.

To put it another way, the audit coverage rate for last year was .84 percent. That means that the IRS audited just .84 percent of the tax returns it received, the lowest coverage rate since 2004. It was also the third straight year the audit coverage rate failed to reach 1 percent, according to USA TODAY.

What is causing this decline? Those who follow the IRS in the news know that Congress has cut the tax collection agency’s budget significantly, forcing staff cutbacks. Meanwhile, the number of individual returns coming into the office has gone up three times in the last four years. Obviously, these trends have combined to make the percentage of tax returns that are audited quite low.

This has led the IRS to voice concerns that tax cheating is going undetected. The agency’s commissioner said during a recent speech that publicity about the IRS’ budget problems could encourage some to cheat on their taxes, thinking they are less likely to get caught.

Of course, we strongly discourage our readers from cheating on their taxes. Even if the odds are low that you will be audited, it is still possible, and an audit can cause serious problems. If you are ever audited, one of the best things you can do to protect yourself is to hire an experienced tax attorney to represent you.