U.S. IRS audited fewer wealthy Americans in 2013

WASHINGTON Fri Mar 21, 2014 5:38pm EDT

A view shows the sign for the Federal Building, where the Internal Revenue Service (IRS) offices are located, in Los Angeles, California October 1, 2013. REUTERS/Kevork Djamsezian

A view shows the sign for the Federal Building, where the Internal Revenue Service (IRS) offices are located, in Los Angeles, California October 1, 2013.

Credit: Reuters/Kevork Djamsezian

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WASHINGTON (Reuters) - The U.S. Internal Revenue Service said on Friday that it audited fewer high-income Americans in 2013 than it did in 2012 or 2011, while it conducted more audits of people with no income.

Total audits fell by 5 percent from 2012 to reach the lowest level since 2008 as the IRS said it coped with budget cuts.

For the fiscal year that ended September 30, 2013, the IRS said it audited 24.2 percent of individual tax returns with adjusted gross income of $10 million or more. That was down from 27 percent in 2012 and 30 percent in 2011.

There were also fewer individual tax returns audited in the $5 million to $10 million gross income band, the IRS said.

In total, the IRS audited about 1.4 million individual returns. IRS Commissioner John Koskinen said in a statement that budget cuts at the agency have "presented challenges."

Wealthy Americans historically are the likeliest to be audited. The IRS a few years ago started a "Global High Wealth Industry Group" to audit high-wealth individuals more efficiently.

But Congress in January cut the IRS's fiscal 2014 budget by about 4 percent to $11.3 billion.

The funding cuts have forced the IRS to cut the number of customer service representatives it employs during tax season, Colleen Kelley, president of the National Treasury Employees Union said in a statement. "Both taxpayers and employees are frustrated."

Last year, audits were done on 6 percent of individual tax returns reporting no gross income, up from 2.7 percent in 2012 and 3.4 percent in 2011.

(Reporting by Patrick Temple-West; Editing by Leslie Adler)

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Comments (4)
gregbrew56 wrote:
Remember – People reporting an income of $0 doesn’t necessarily mean they are poor. They just might have an effective tax-avoidance strategy…or be lying.

Mar 21, 2014 5:54pm EDT  --  Report as abuse
yogahelps2 wrote:
I’d like to see
the cost/benefit to the fed gov’t of audits, not just the % of returns that are audited. A little more in-depth reporting, please.

Mar 21, 2014 8:03pm EDT  --  Report as abuse
altalks21 wrote:
Tax the wealthy till there are no more poor people.

Mar 21, 2014 10:51pm EDT  --  Report as abuse
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