| If the IRS thinks a taxpayer owes money, its efforts to collect could include levying bank accounts, placing liens on their home, garnishing their salary, and even refusing to issue a passport.
Nobody wants to be audited by the Internal Revenue Service. But somebody
has to be.
The IRS audited 3.8 out of every 1,000 returns, or 0.38%, during its fiscal year 2022, down from 0.41% in 2021, according to a recent report from Syracuse University’s Transactional Records Access Clearinghouse. That percentage is expected to rise in 2023 after the Inflation Reduction Act, which became law last summer, increased the budget for the IRS by $80 billion over 10 years.
InvestmentNews caught up with Yvonne Cort, lead tax compliance and tax controversy partner at Capell Barnett Matalon & Schoenfeld, to find out how the jump in IRS funding will affect audits going forward, as well as what individuals should do if they get a fateful letter saying they owe a significant amount.
InvestmentNews: Do you expect a step-up in IRS audits in 2023?
Yvonne Cort: The IRS has had cutbacks and been short-staffed for many years. This is a revenue-producing arm of the government and it is chronically underfunded, with outdated technology. Many long-term, experienced agents have retired. The recent increase in funding is allowing… |
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