IRS Audits 1 out of 120 US Households

April 1, 2016 Taxation in USA

WASHINGTON D.C. – In 2015 the IRS focussed its audits on individuals with incomes of more than USd 10 million and on individuals claiming to have no income at all.

Over the course of 2015 1 228 117 individual income tax returns were audited by the US Internal Revenue Service, according to a statement issued on March 31st by the US think tank the Tax Foundation.

Approximately 0.8 percent of all filers were audited during 2015, a rate equivalent to an estimated 1 in every 120 households in the country.

The Tax Foundation found that taxpayers were more likely to be audited if they had high levels of income or, conversely, reported no income.

Approximately 35 percent of all filers with incomes higher than USD 10 million were audited, with 19 percent of those earning between USD 5 million and USD 10 million being audited.

More than 1 percent of individuals reporting incomes of less than USD 25 000 were audited, and 3.78 percent of those reporting no income at all were audited.

The spike in audits for individuals with no incomes was attributed to the eligibility of low-income households to the Earned Income Tax Credit, which has often been claimed to be used for tax fraud.

The audit rate seen over the course of 2015 has fallen, with 350 000 less households being audited in 2015 compared to 2010.

Photo By: Simon Cunningham