NCPA - National Center for Policy Analysis

Dramatic Decline In IRS Audits

April 12, 1999

Fewer people are having their tax returns audited than ever before, according to a study by the Transactional Records Access Clearinghouse, a research organization at Syracuse University. Analysts there concluded that "the falloff in tax enforcement has been dramatic."

  • Fewer than 0.5 percent of all individual taxpayers were subject to face-to-face Internal Revenue Service audits last year -- an all-time low.
  • In all, 164,195 fewer taxpayers were subjected to an audit last year than in 1997.
  • Of the 120.3 million returns filed last year, 551,420 were audited -- down from 715,615 the previous year.
  • For taxpayers with gross incomes of $100,000 or more, 1.13 percent faced district audits -- less than half the rate of six years earlier.

Moreover, criminal prosecutions for tax fraud are declining. The U.S. Justice Department brought 766 tax cases last year based on IRS referrals -- down from 873 the year before and about half the number brought in 1981. That year, the percentage of returns audited stood at 1.59.

Source: William M. Welch, "IRS Audits on Decline, Study Finds," USA Today, April 12, 1999.


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