Audit jeopardy plunges for very rich

Audits of the highest-income households dropped sharply, to their lowest levels since the Internal Revenue Service began reporting that data in 2008, according to figures released Monday.

In fiscal 2018, the IRS audited 6.7 percent of returns of filers with more than $10 million in adjusted gross income, down from 14.5 percent in 2017. Among households with income between $1 million and $5 million, the audit rate dropped from 3.5 percent to 2.2.

The IRS audited just 0.59 percent of individual tax returns last year, marking the seventh consecutive annual decline as the tax agency copes with smaller budgets and fewer workers.

That total was down from 0.62 percent the year before and hit the lowest mark since 2002.

The IRS released the data as it is trying to persuade Congress to make long-run investments in the agency’s technology and enforcement staff. So far, however, key Republicans in Congress remain skeptical.

“I’m not averse to beefing up their budget a little bit but I want to see results,” said Sen. John Kennedy (R-La.), who heads the subcommittee that oversees the IRS budget. “I’ve got a lot of confidence in the new commissioner and in the new secretary, but I’m not into just throwing money at the wall because the bureaucracy says we need more.”

Democrats say the IRS budget cuts are disproportionately benefiting high-income households.

“Republicans in the Senate and the House have been very much geared towards a policy that has produced lots of poor people being audited and lots of welloff people basically getting off the hook,” said Sen. Ron Wyden (D-Ore.), the top Democrat on the Senate Finance Committee. “It takes more resources. There’s no way around it.”