Amidst a surge in IRS audits targeting taxpayers with incomes under $200,000, the middle-class finds itself increasingly in the agency’s crosshairs. With audit rates soaring and reforms faltering, understanding the audit process has never been more crucial for taxpayers.
Key Points:
- Despite President Biden’s mandate to audit more ultra-wealthy individuals, recent data reveals that the majority of new IRS audits are targeting taxpayers earning less than $200,000 annually.
- A 43-page report by the U.S. Treasury Inspector General for Tax Administration (TIGTA) highlights the IRS’s failure to meet strategic operating goals, with only 33% of milestones completed for Fiscal Year 2023.
- The Transactional Records Access Clearinghouse (TRAC) reports that individuals earning up to $200,000 annually are the most audited by the IRS, while efforts to pursue the ultra-wealthy remain sluggish.
- Taxpayers facing audits should understand the different levels of scrutiny, ranging from mail audits for minor errors to field audits conducted in-person by IRS agents.
- Organizing paperwork, seeking assistance from tax preparers, and knowing taxpayer rights are essential steps for navigating the audit process effectively.
- Taxpayers should beware of phone scams impersonating the IRS and exploiting fears of audits, emphasizing the importance of verifying communication channels to avoid falling victim to fraud.
Source:
https://finance.yahoo.com/news/middle-class-earners-most-targeted-101000528.html
63% of new audits as of Summer 2023 targeted taxpayers with income of less than $200,000, per WSJ.
— unusual_whales (@unusual_whales) May 7, 2024