IRS Conducting Fewer Audits Because of Budget Cuts

Here’s your feel-good story of the day.

The IRS said yesterday that it has fewer resources available to audit your tax returns.

Budget cuts forced the IRS to reduce the number of audits last year to the lowest level in a decade — and it could go down even more this year, IRS Commissioner John Koskinen said Tuesday.

“The math is pretty simple,” Koskinen said in a speech to the New York State Bar Association. “There are fewer audits because we have fewer auditors. Audits fell in virtually every individual category and across income levels.”

The number of audits last year was only 1.2 million tax returns, which is less than 1% of all returns filed. That is the lowest rate of auditing since 2004.

Koskinen said the IRS is down more than 2,200 revenue agents since 2010.

Last year, a little more than 11,600 revenue agents examined returns, and Koskinen is warning that the number of agents will decline again this year.

Congress has cut the agency’s budget by $1.2 billion since 2010.

The IRS budget for the year ending this September was $10.9B.