Published by FOX Business | May 3, 2023
IRS also plans to nearly triple audit rates on large corporations with assets over $250M
The IRS is planning to ramp up audit rates of wealthy Americans and large corporations as part of its sweeping effort to crack down on tax cheats.
The tax-collecting agency aims to increase the audit rates of taxpayers earning over $10 million by more than 50%. That will bring the audit rate for these individuals to 16.5% in 2026, compared with 10% in 2019.
It also plans to nearly triple audit rates on large corporations with assets over $250 million, as well as increase the audit rates of business partnerships with assets over $10 million by tenfold.
“At the same time, the IRS continues to emphasize the agency will not increase audit rates for small businesses and taxpayers making under $400,000, and those rates remain at historically low levels,” the agency said.
Funding for the latest enforcement efforts was included in the Democrats’ health care and climate change spending bill – dubbed the Inflation Reduction Act – that President Biden signed into law in 2022. The influx of money is aimed at improving tax compliance among big corporations and wealthy Americans and shrinking the estimated $600 billion tax gap.
The IRS said it plans to spend $9.3 billion in fiscal 2025, $7.3 billion in fiscal 2026 and a total of $57.82 billion over the decade though fiscal 2031, according to Reuters.
