Though Rare,Tax Audits Follow the Money

IRS tax audits have become an endangered species. From 2010 to 2018, the overall audit rate for individual tax returns dropped by 47%. The audit rate for top taxpayers – those with incomes of $10 million or more – dropped by 64%.

Amount of taxes owed but unpaid
in last fiscal year

To make the most of limited resources, Barron’s reports, the IRS has relied on technology and carefully targeted collection efforts. Income stashed offshore, for instance. From 2009 to 2018, the IRS persuaded 54,000 offshorers to hand over more than $11 billion in taxes due.

Taxpayers dealing in cryptocurrencies are another IRS target. Are Bitcoin and such really currencies or just investments? Lately the IRS has leaned toward the latter view.