As we reported a few weeks ago, in an interview with Forbes, National Taxpayer Advocate Nina Olson described the results of the the $10.9 billion IRS budget Congress approved for the agency’s next fiscal year: not enough staff to answer the phones, and not enough agents to investigate fraudsters and collect what’s owed.
Bloomberg Business reports that Chuck Marr, director of federal tax policy for the Center on Budget & Policy Priorities, has announced that the percentage of taxpayers audited has fallen to 0.96 percent. Marr says, “You’re just gutting the part of the IRS that goes after tax cheaters.” The IRS will fail to collect at least $2 billion this tax season, or about $6 lost for every $1 of budget cuts.
But cheating still isn’t a good idea. If a taxpayer significantly misstates income by 25 percent, the IRS can go back 6 years for an audit. And by then, the IRS may be have a bigger budget.