Poor taxpayers are far more likely to be audited by the IRS than high-income taxpayers – and the trend has only increased in the last decade, according to data released by the agency last week.
Americans who receive the earned income tax credit – the U.S.’ largest anti-poverty program – are audited at a higher rate than all but the top 1%, ProPublica reported, citing the data.
A new study suggests the IRS targets lower-income taxpayers at a higher rate than millionaires. (gsa.gov)
Sen. Ron Wyden, D-Ore., called the double standard an “open invitation to cheat, low-income taxpayers are receiving heightened scrutiny because they can be audited far more easily. All it takes is a letter instead of a team of investigators and lawyers.”
Dean Patterson, IRS spokesman, blamed the poor being audited more frequently on huge swaths of agents going into retirement because of budget cuts. With the IRS’ limited resources, Patterson said, “Correspondence audits are also the most efficient use of IRS’ limited examination resources.”
On top of that, the response rate of the poorest taxpayers is dismally low. According to another study, only 34% of those with annual wages under $10,000 responded to EITC audits – a statistics blamed on their hard-to-reach residencies.