Tax Audits Fall Victim To Budget Cuts

tax audits
The IRS has cut back on tax audits.

The IRS has pulled back on tax audits following years of budget cuts at the agency.

The agency’s enforcement division was slashed as a result of 2011 budget cuts, according to a joint investigation by Pro Publica and the New York Times. According to the report:

Bringing cases against people who evade taxes on legal income is central to the revenue service’s mission. In addition to recouping lost revenue, such cases are supposed “to influence taxpayer behavior for the hundreds of millions of American citizens filing tax returns,” Fort said. With fewer cases, experts fear, Americans will get the message that it’s all right to break the law.

Starting in 2011, Republicans in Congress repeatedly cut the IRS’s budget, forcing the agency to reduce its enforcement staff by a third. But that drop doesn’t entirely explain the reduction in tax fraud cases.

Over time, crimes only tangentially related to taxes, such as drug trafficking and money laundering, have come to account for most of the agency’s cases.

Of course, taxpayers should do the right thing regardless of whether a tax audit looms. Nor should they be lulled into complacency. But they also shouldn’t pay more than they have to. When it comes to taxes, a great accountant is a necessity. As we say on our website:

We provide innovative solutions for tax issues to minimize your tax liability, we find deductions commonly overlooked, and we stay up-to-date and well informed on all tax laws and legislation. It’s good to also remember that tax season comes around once every year, so good planning throughout the year is important to mitigating your tax exposure, allowing you to keep ore of what you earn. It’s a delicate balance that exists between optimizing your after-tax income and minimizing your pre-tax dollars. We offer advice on both short-term and long-term tax strategies, initiatives and investments. Our tax service is designed exclusively to help you maximize your earning power.

 

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