Middle-class earners are the most targeted group for IRS audits
Middle-class earners are the most targeted group for IRS audits, per Moneywise.
In fact, 63% of new audits as of Summer 2023 targeted taxpayers with incomes of less than $200,000, according to figures compiled by The Wall Street Journal’s editorial board, which dubbed the $200,000 earner the “IRS’s most wanted.”
So, middle-class readers beware: If you file around $200,000, you very much remain in the agency’s crosshairs.
But what should you do if you’re audited? First and foremost: Don’t panic. Here are four things to expect if IRS agents decide to scrutinize your 2024 return.
Government report confirms reform issues
The agency’s poor performance was documented in March in a 43-page report by the U.S. Treasury Inspector General for Tax Administration (TIGTA). As of last year, the IRS had a strategic operating plan to overhaul its auditing structure and “deliver transformational change for taxpayers.” However, of the 58 milestones set for Fiscal Year 2023, “IRS management identified that [it] completed 19,” or just 33%. It also doesn’t know how or when it will finish the rest.
Imagine that: paying a third of your taxes late and not telling the taxman when you’ll pay the rest. But while the IRS is significantly behind on its checklist, it remains punctual with audits. Call it efficiency in action, even if it's misplaced.
A deeper look (the kind auditors like) adds context to the picture. The Transactional Records Access Clearinghouse, a non-partisan data research center from Syracuse University, reports that those making up to $200,000 annually were the most audited by the IRS (67%).
Meanwhile, IRS efforts to pursue the ultra-wealthy look poor. The TIGTA report confirms that “the first wave of revenue agents and specialists for large corporations, large partnerships, high-income, and high-wealth individuals … have yet to be hired and onboarded.”