The Numbers

What's Wrong at the IRS: A Look Behind the Numbers

Press Releases

• Tax Fairness A Casualty of Inadequate IRS Resources and Staffing (4/9/07)

The Internal Revenue Service is experiencing a shift in philosophy which focuses enforcement efforts too much on wage earners and not enough on high-income individuals and large businesses and corporations. Take a look:

From 2.9 percent to 0.35 percent. The rate of face-to-face audits of high-income taxpayers from 1992 through fiscal 2004.
Initial source: TRAC
IRS data quoted by NTEU in March 2007 House testimony

More Numbers!
• Tax debt privatization
• IRS budget and staffing

59 Percent. The decline in the number of corporate tax examinations since fiscal year 1997. From 1997 to 2006, the total number of corporate tax returns examined decreased from 69,295 (1 out of 37 returns filed) to 28,427 (1 out of 80 returns filed).
TIGTA Report, Trends in Compliance Activities through Fiscal Year 2006

62 percent. The percent of examinations of high-income taxpayers—those with incomes over $100,000—conducted via correspondence in 2006. While the IRS shows an increase in examinations of high-income taxpayers, 62 percent of those were correspondence examinations.
TIGTA Report, Trends in Compliance Activities through Fiscal Year 2006

157 out of 345. The number of estate and gift tax attorneys—who audit the wealthiest Americans—the IRS wanted to eliminate last year despite these employees being the most productive in the agency. Eighty-one positions have been eliminated thus far.
IRS estimate when it announced its plan in 2006
Also cited in New York Times article by David Cay Johnston

$2,200. The average amount estate and gift tax attorneys find in additional taxes for every hour worked.
IRS figure when it announced its plan in 2006
Also cited in New York Times article by David Cay Johnston

At least 20 percent. How much less time IRS auditors are being allowed to spend on audits of large companies—and they are being limited in the matters they can look into.
New York Times article, January 2007, quoting IRS employees
IRS data quoted by NTEU in March 2007 House testimony
Initial source: The Transactional Records Access Clearinghouse (TRAC), a data gathering, data research and data distribution organization associated with Syracuse University.
Also cited in Jan. 16, 2007 letter to from Reps. Neal and Emanuel to IRS.

From 665,868 to 305,000. The projected decline in the number of tax returns prepared by the IRS for low-income taxpayers between fiscal 2003 and fiscal year 2006.
Written statement of Nina Olson before the House Budget Committee on Feb. 26, 2007. P. 11

Click here for more numbers on the the IRS tax debt privatization program, budget and staffing