With the added funding, added agents, and added desire to shrink the “tax gap” ($688 Billion in 2021), people are concerned if they are on an IRS hitlist to be audited. Let me start by saying, if you did nothing wrong, there isn’t much to worry about, but mistakes do happen, so there is always a risk.
Below are the future audit plans the IRS foresees to follow with their newfound wealth:
1. The plan highlights the IRS will nearly triple audit rates on large corporations with assets over $250 million to 22.6% in tax year 2026, up from 8.8% in tax year 2019.
2. The IRS will increase audit rates by nearly ten-fold on large, complex partnerships with assets over $10 million, going from 0.1% in 2019 to 1% in tax year 2026.
3. The IRS will increase audit rates by more than 50% on wealthy individual taxpayers with total positive income over $10 million, with audit rates going from an 11% coverage rate in 2019 to 16.5% in tax year 2026.
4. At the same time, the IRS continues to emphasize the agency will not increase audit rates for small businesses and taxpayers making under $400,000, and those rates remain at historically low levels.
Time will tell if these guidelines actually fall into place, but at least on paper, most Americans do not need to fear the IRS any more than they feared the IRS before their additional funding.
If you find yourself being called to audit by the IRS, get professional help. The IRS knows more than you do, so don’t go it alone. Set up a free 30 minute consultation by going to https://CtTaxResolution.com/appointment .