IRS tax enforcement plummets to the lowest level in almost 40 years after rounds of GOP-led budget cuts
- Years of budget cuts and a heavier workload have pushed the Internal Revenue Service's enforcement efforts to their lowest levels in almost 40 years, according to the Wall Street Journal.
- The IRS audited 0.45% of personal-income tax returns in fiscal year 2019, the eighth year in a row that it dropped.
- Individual taxpayers are now half as likely to get an audit from the IRS compared to a decade ago.
- The organization's $11.4 billion budget is about 20% lower than it was in 2010 when Republicans took control of the House of Representatives and pushed for fiscal austerity.
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Years of Republican-led budget cuts and a heavier workload have pushed the Internal Revenue Service's enforcement efforts to their lowest levels in almost 40 years, according to the Wall Street Journal.
In fiscal 2019, the IRS audited 0.45% of personal income-tax returns, a drop from 0.59% in 2018, the agency said in a new report. It's the eighth year in a row that it fell - and individual taxpayers are now only half as likely to face an audit compared to 2010 when the agency audited 1.1% of tax returns.
The IRS workforce stands at 78,000 employees, a level it noted was "well below levels in previous decades" though it was still hiring. The IRS shed almost 30,000 workers since fiscal year 2010, the report said.
IRS commissioner Charles Rettig said in the report that the organization is incorporating data analytics in a bid to find people who are not complying with US tax laws and maintain their enforcement.
ProPublica reported in late 2018 that auditors are often forced to conduct their investigations quickly in order to move onto the next one, though the economy continues to grow. The IRS has fewer auditors now than it did in 1953, when the American economy was only one-seventh of its current size.
The agency's report underscores the diminished reach of the agency after years of GOP-led budget cuts and is likely to increase calls to step up IRS funding to collect more funding as the federal deficit steadily grows.
Harvard University economist Lawrence Summers and University of Pennsylvania professor Natasha Sarin have projected that bolstering IRS enforcement abilities could raise $1 trillion over ten years, with every federal dollar spent generating more than $11 in tax collection.
Democratic presidential candidates are calling to shore up the enforcement abilities of the IRS. The organization's $11.4 billion budget is about 20% lower than it was in 2010 when Republicans took control of the House of Representatives and pushed for fiscal austerity.
Sen. Elizabeth Warren in particular is eyeing to increase funding for the agency to generate additional revenue for her signature wealth tax on the richest taxpayers in the United States.