Who knows what evil lurks in the hearts of men? The Shadow knows….
But the IRS does not.
That’s right, friends and neighbors, because of budget cuts, controversies, employee terminations and heavier workloads (for surviving employees), your chances of being audited this year are actually rather slim. To compound the issue, the IRS reports that “up to 31% of remaining [IRS] workers will retire within the next five years” (WSJ.com). I don’t want to compare the IRS with The Mary Celeste but, when the entire crew disappears, all you’re left with is an abandoned ship.
To put it in perspective, “roughly 1 out of every 220 taxpayers were audited last year. A decade ago, those odds were closer to 1 in 90” (CNBC.com). This is mostly because the biggest budget restrictions “have been in funding for enforcement, which includes audits” (CNBC.com). That means that there are billions of dollars out there that the IRS would have collected if they had enough people to get out there. Which they don’t.
Not surprising, the two groups who are most likely to get audited, even now, are the very poor and the very rich. Because of so many fraudulent claims, the IRS takes a hard look at those who claim earned income tax credit (Nolo.com). The lack of IRS staff comes into play here, as well: honest lower-income taxpayers who are audited can expect to wait for over a year before receiving their tax refund (Propublica.org). There just aren’t enough agents to go around.
While the rich still have a higher instance of audits compared to the general populace, the numbers are declining, there, too: between 2015 and 2018, audits for the wealthy dropped from 9.5% to 2.21% (Nolo.com). It seems that the safest place to be in these harsh times is smack dab in the middle. From everything I’ve gleaned from the media, middleclass taxpayers are the least likely to be audited (yes, IRS audits are random. Mostly).
This is not an invitation to all would-be criminals out there to try their hand at tax fraud, money laundering or any other nefarious tax-related crime. I might be a little bit of a rebel, but even I acknowledge that our tax dollars fund schools, roads, firefighters and police. Imagine if you called to report a fire and the dispatcher said: Due to employee cuts, no one can come to your fire. I think we have a Super Soaker in the back you can borrow. As much as I hate to admit it, we need our IRS agents.
Chances are, you won’t be audited this year. If you have a Bourke Accounting pro in your corner, those odds drop even more. However, if you do happen to be audited, your Bourke Accounting specialist will work tirelessly on your behalf. I’m not promising that, after an audit, you won’t have to wait a year to get your tax refund. But I can promise that the IRS will get so sick of hearing a Bourke Accounting voice on the other end of the line, they might just bump you to the front of the line (you have met Bill and Tim, right?).
Written by Sue H.