Audit odds plummet to 1- in- 143 amid IRS staff cutbacks

But stay scrupulous, it still could happen

The risk of facing an IRS audit fell to a 14- year low in 2016.

The audit rate, the percentage of individuals’ tax returns IRS agents examined either face- toface or via correspondence dropped to 0.7% in federal fiscal year 2016, the lowest since 2003, updated data from the nation’s tax agency shows.

The continued decline coincides with reductions of IRS personnel who conduct audits and comes amid preliminary Trump administration budget plans that could further cut the enforcement staffing.

Mathematically, the audit rate “means that it’s not too likely,” said Sylvain Cappell, a New York University mathematics professor who calculated the probability at 1- in- 143 at the request of USA TODAY.

Although higher- income earners generally face relatively higher audit percentages, those rates also have dropped to more- than- decade- long lows. For those whose annual income is $ 200,000 or more, the 2016 audit rate was 1.7%. Taxpayers whose income totaled $ 1 million or more faced a comparable rate of 5.8%.

Business filers face declining chances of being audited. In all, 0.49% of federal tax returns filed by small and large corporations, partnerships and “subchapter S” returns were audited last year, the IRS data show. That represents the lowest rate since the 0.36% rate in 2004.

“Despite these declines, taxpayers should keep in mind the IRS still audited more than 1 mil- lion tax returns last year,” IRS Commissioner John Koskinen said in a statement Monday.

However, a tax expert who regularly represents clients on IRSrelated issues offered a decidedly different perspective.

“The significance is it’s a good time to be a tax cheat in this country,” said Robert McKenzie, an Arnstein & Lehr law firm partner in Chicago.

The combined number of revenue officers, revenue agents and special agents fell to 15,914 last year, continuing a now sevenyear decline. The total represents a 30% drop from 2010, the last time the audit staffing increased.