--- title: 'The IRS Focused on Auditing Low-Income Earners Over Millionaires Last Year: Report' description: Only 1 in 100 millionaires was audited by an IRS revenue agent last year, according to a new report. Low-income taxpayers weren't so lucky. authors: - name: Mary Ellen Cagnassola role: Reporter url: https://money.com/author/mary-ellen-cagnassola/ bio: Mary Ellen (M.E.) Cagnassola is a former reporter at Money, where she covered Social Security, retirement, housing, and employment. Her work reflects her commitment to service and equity in consumer finance. education: Rutgers University, BA Journalism at_money_since: 2021 articles: 205 covers: - Taxes - Banking - Business - Career Advice - Credit - Credit Cards - Economy and Politics - Education - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Pets - Professional Services - Retirement - Shopping former_staff: true editors: - name: Julia Glum role: Managing Editor url: https://money.com/author/julia-glum/ bio: A graduate of the University of Florida, Julia has more than eight years of experience in personal finance journalism. In addition to overseeing news and newsletters, she leads Money’s tax coverage, which includes extensive reporting on tax credits, policy changes and the IRS. education: University of Florida at_money_since: 2018 articles: 453 covers: - Taxes - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Retirement - Shopping - Technology also_seen_in: - Newsweek - International Business Times - CBS News - Good Morning America - WUSA9 - Pix 11 - The New York Times - Mashable - The Washington Post - CNBC - Politico social: - https://x.com/superjulia - https://www.linkedin.com/in/julia-glum published: '2023-01-09T19:56:39.000Z' modified: '2024-01-10T14:30:52.000Z' section: Taxes tags: - News - Taxes word_count: 497 canonical: https://money.com/irs-audits-millionaires-low-income/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Person going through their finances at home](https://img.money.com/2023/01/News-How-Many-Tax-Payers-Audited.jpg) More money, more problems, right? Not with the IRS, according to a [new report](https://trac.syr.edu/reports/706/) that suggests the wealthy overwhelmingly escape [audits](https://money.com/irs-funding-higher-taxes-more-audits/). Syracuse University’s Transactional Records Access Clearinghouse (TRAC), a nonprofit data and research gathering organization, found in a review of monthly IRS management reports that only 1 in 100 millionaires was audited by an IRS revenue agent last year. Out of the 703,576 tax returns filed in 2022 reporting an income of at least $1 million, roughly 689,000 faced no IRS inquiry. To put that into context: A decade ago, the IRS audited 40,965 returns filed by millionaires, TRAC says. That number fell by nearly 75% to a bottom of 11,331 in 2020. TRAC said for those who did come under IRS scrutiny in 2022, automated correspondence audits — or letters asking for more documentation on a specific item via mail — mostly replaced more thorough in-person audits. Eighty-five percent of all audits of 1040 returns (the standard form [filed](https://money.com/how-to-file-taxes-for-free/) by individual taxpayers) were conducted by mail in 2022. One group, however, was not as lucky as the rich in avoiding the long arm of the IRS, even with funding and staffing [challenges](https://money.com/irs-tax-season-delays-customer-service/) in recent years. Low-income families, according to the nonprofit, had a 1.27% audit rate — higher than that of millionaires when correspondence audits were removed from the picture. “While these small differences may sound trivial, the difference represented tens of thousands of low-income families,” TRAC said in its report. “And the question remains, should these low-income families be the ones targeted when millionaires are responsible dollarwise for most tax underreporting?” Low-income wage earners who earn under $25,000 annually and claim the Earned Income Tax Credit were five and half times more likely to be [audited](https://money.com/taxes-getting-audited-irs-2020/) than other taxpayers. TRAC also said these taxpayers have a history of being targeted because they are “easy marks,” especially at a time when the IRS is increasingly relying on automation and has fewer resources to assist taxpayers. TRAC said transparency is more important than ever now that the IRS will receive an infusion of $80 billion over the next decade, in part to crack down on wealthy tax evaders, from [the 2022 Inflation Reduction Act](https://money.com/inflation-reduction-act-save-you-money/). More than $45 billion is earmarked to increase audits and help close the $600 billion deficit between the taxes collected by the agency and what it's owed, a decision lambasted by congressional Republicans who say it will also increase audits on everyday taxpayers. Former IRS Commissioner Charles P. Rettig dismissed those concerns in [letters](https://www.irs.gov/pub/irs-utl/commissioners-letter-to-the-senate.pdf) to Congress in August 2022, saying that audits on taxpayers making less than $400,000 a year would not increase. Nevertheless, new House Speaker Kevin McCarthy, R-Calif., has [vowed](https://twitter.com/TPostMillennial/status/1611611704244457472) to repeal the funding as one of his first orders of business. [Do You Pay Your Fair Share of Taxes? Americans Are Split](https://money.com/pay-fair-share-taxes-survey-politics/) [The IRS Just Gave Gig Workers an Extra Year to Prepare for a Major Tax Change](https://money.com/irs-delays-major-tax-change-gig-workers/) [IRS Warns Tax ‘Refunds May Be Smaller in 2023’](https://money.com/irs-warns-tax-refunds-smaller-2023/) ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/irs-audits-millionaires-low-income/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Taxes", "item": "https://money.com/taxes/" }, { "@type": "ListItem", "position": 3, "name": "Tax Returns", "item": "https://money.com/tax-returns/" }, { "@type": "ListItem", "position": 4, "name": "The IRS Focused on Auditing Low-Income Earners Over Millionaires Last Year: Report" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/irs-audits-millionaires-low-income/#webpage", "url": "https://money.com/irs-audits-millionaires-low-income/", "name": "The IRS Focused on Auditing Low-Income Earners Over Millionaires Last Year: Report", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2023-01-09T19:56:39.000Z", "mainEntity": { "@id": "https://money.com/irs-audits-millionaires-low-income/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/irs-audits-millionaires-low-income/#breadcrumb" }, "dateModified": "2024-01-10T14:30:52.000Z" }, { "@type": "NewsArticle", "headline": "The IRS Focused on Auditing Low-Income Earners Over Millionaires Last Year: Report", "articleSection": "Taxes", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2023/01/News-How-Many-Tax-Payers-Audited.jpg", "width": 2880, "height": 1920, "caption": "News-How-Many-Tax-Payers-Audited" } ], "author": [ { "@type": "Person", "name": "Mary Ellen Cagnassola", "url": "https://money.com/author/mary-ellen-cagnassola/", "@id": "https://money.com/author/mary-ellen-cagnassola/#author", "description": "Mary Ellen (M.E.) 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