What are your chances of an IRS audit?
The Internal Revenue Service wasn't just letting calls go unanswered last tax season, the agency was also auditing fewer tax returns: 22 percent less than five years earlier.
That's according to the Center on Budget and Policy Priorities, a left-leaning think tank that analyzes the impact of federal and state government policies.
Because of budget cuts that IRS Commissioner John Koskinen has blasted as penny wise but pound foolish, the government's tax-collection arm no longer has the manpower to conduct as many audits of high-income taxpayers and businesses as in years past, the center found.
In 2010, the IRS audited 1.2 million taxpayers, or 1.1 percent of individual returns, a count that declined by more than 350,000, or 0.8 percent in 2015, the lowest level in a decade, the center said in an update published earlier this month. Given the agency's funding level is $900 million lower in fiscal 2016 versus five years earlier, there's little reason to believe the trend won't continue.
And while some tax payers may breath easier knowing the odds of having the tax collector at their door has lessened, others might be annoyed that the reduced enforcement means some are getting away with cheating Uncle Sam.
Audits recovered about $30 billion, or 30 percent, less in the past five years than in the prior five years, the center said, while citing Treasury estimates that every additional $1 invested in IRS tax enforcement yields $4 in increased revenue. Or, as IRS Commissioner John Koskinen summarized, "Essentially, the government is losing billions to achieve budget savings of a few hundred million dollars."
The agency "has been operating in an extremely difficult budget environment for several years," Koskinen said in written testimony submitted Thursday to a House panel.
The IRS is not collecting about $6 billion a year in money owed, due to the agency's staffing shortages, the commissioner said in a March 24 speech to the National Press Club:
"These staffing losses have translated into a steady decline in the number of individual audits over the past six years. Last year, in fact, we completed the fewest audits in a decade. Plus, our audit coverage rate in 2015 was the lowest since 2004. That trend line of fewer audits will continue this year."