Increasing Tax Audits

Congress recently gave the IRS a very large pay raise (Inflation Reduction Act of 2022). The IRS had been woefully understaffed due to retirement in the last several years and not enough funds to hire and train a new infusion of staff. It also had computer hardware and software which desperately needed upgrades. I met with one auditor who was using a six year old computer, which took 10 minutes to reboot every time it froze. 

The impact of the increased funding will be a larger but much less experienced workforce. And, many more audits occurring down the road. While politicians have promised to focus on the high earners, it is important for all taxpayers to try to audit-proof tax returns as much as possible during the tax preparation process.

It’s “going to hit pretty soon”

The IRS anticipates increasing audits on “wealthiest taxpayers, large corporations, and partnerships” (read more: irs.gov, May 2, 2024).

“They're filling out the ranks there, and this audit activity is going to hit pretty soon,” said Dustin Stamper of Grant Thornton (read more: Journal of Accountancy, June 6, 2024).