If you have an audit-phobia, there’s good news for you: data shows that the IRS budget cuts have resulted in significantly fewer audits for most taxpayers. (In fact, the average taxpayer’s chances of being audited have fallen 23% over the last three years.) Even if you’re wealthy, in the $200,000-$1 million+ annual income range, your chances of being audited are dropping.
The only taxpayers who aren’t so lucky are those who live overseas. As BloombergBusiness recently reported, new regulations have resulted in increased audits for people in this group.
Although fewer audits mean fewer sweating taxpayers, it’s also resulting in a higher incidence of tax evasion. Last year, the IRS uncovered 15% less in unpaid taxes, and that’s probably not due to a sudden plethora of guilty consciences. IRS Commissioner John Koskinen estimates that budget cuts mean the government is losing at least $2 billion in revenue per year.