Citizens of the United States with smaller sources of income had in 2022 a number of audits from IRS. These audits were more numerous for these types of people than for citizens with a larger amount of money. Thus, taxpayers with lower income brackets are up to five times more likely to receive an audit. This may be bad news for many citizens.
According to National Taxpayer Advocate Erin M. Collins in Fox News, “The IRS correspondence audit process is structured to expend the least amount of resources to conduct the greatest number of examinations – resulting in the lowest level of customer service to taxpayers who have the greatest need for assistance.” These words allude to the report during the annual meeting of Congress.
Internal IRS management reports done by Syracuse University through TRAC (Transactional Records Access Clearinghouse) point to trends in 2022. These trends suggest that audits focused more on lower income users.
What is the IRS audit data?
In most audits, the IRS does not have to go in person to conduct a visit. These audits are done via mailing address. They are automatically produced letters and sent to taxpayers. So, it’s a process that is actually already automated today.
Eighty-five percent of the audits performed by the IRS were done through these automated letters. With these letters, the IRS requests additional information and specific documentation that is intended to illustrate some piece of information from the taxpayer.
The number of audits was 659,003 in 2021, while in 2022 they went to 626,204 in total. There is a clear reduction from one year to the next. Knowing that taxpayers made 164 million returns, audits are a small percentage.
For the most part, these audits were of taxpayers who earned a small amount of money. Inexplicably, taxpayers with larger returns did not have too many encounters with the IRS, something we do not know if this will be repeated in this year 2023.
Do audits affect the Stimulus check?
In theory, these types of audits should not negatively affect the taxpayer’s Stimulus check. If a person has declared everything legally, the Stimulus check continues to work in the same way. However, it is necessary to have the tax return filed at the time it is required to be filed.
To eliminate any doubts related to tax returns, audits, IRS and Stimulus Check, it is always a good idea to have an advisor. Whether it is an IRS specialist advisor or an economist advisor. It is the best way to forget about these types of tax obligations and sleep with a clear conscience.