IRS Audit Chances Dropping For a Sixth Consecutive Year
Back to list
For a sixth consecutive year, the number of audits conducted by the Internal Revenue Service (IRS) has dropped in the United States. In fact, never have the odds of being audited been so low.
As a matter of fact, only a bit more than one million citizens were audited in 2016. The last time so few audits were conducted was in 2004. Since then, 30 million more Americans have been added to the population, which was 318.9 million in 2014.
The drop between 2015 and 2016 represents 16%. Only 0.7% of individuals were subject to an audit last year.
Was that because of the people's honesty and transparency? Not exactly. It was rather due to major cuts in the Internal Revenue Agency budget. The Agency's annual budget went from 12.2B$ in 2015 to 11.2B$ in 2016. Over 17 000 jobs were lost last year alone, leaving only about 80 000 employees available, a serious drop.
IRS Commissioner John Koskinen is of course upset by this situation. He estimates the recent cuts will cost the government between $4B and $8B in lost taxes. "We are the only agency where, if you give us a bigger budget and resources, we will give you even more money in return" he explains.
Does this mean taxpayers should become less attentive to their file? Of course not! Although less people are audited, it is still possible to become the next number out of the big IRS hat. If you are not well prepared for an audit, it could mean problems and ultimately superior costs and fines.
For Canadians wishing to file and regain the taxes paid on a casino or lottery win, this means first and foremost to keep an accurate log of your gambling activities. See our advice on building a gambling log able to withstand an IRS audit.
Have you won a jackpot that was taxed through a 1042-S form in the US? Take advantage of our turnkey solution in order to recuperate this money! Fill out this form and get a free assessment of your file.