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IRS working to increase audit rates for high-earning Americans

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BRAZIL - 2022/05/22: In this photo illustration, the homepage of the Internal Revenue Service (IRS) website seen on a computer screen through a magnifying glass. (Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images) WASHINGTON - The IRS has been increasing its audit rates for earners making $100,000 or more based on data starting from the 2021 fiscal year.

The IRS said "resource constraints" have limited the agency’s ability to conduct audits against high net worth individuals as well as major corporations and complex businesses," according to a statement released in May. "Audit rates for taxpayers with incomes of more than $200,000 decreased the most, largely because higher-income audits tend to be more complicated and require auditors to manually review multiple issues," Ken Corbin, chief taxpayer experience officer for the agency, told the House Oversight Subcommittee in May.A 2021 report found that IRS audits overall declined by 44% between the fiscal years of 2015 and 2019.

The report found that Americans making more than $5 million per year only had a 2% chance of being audited, according to the report.

The most recent announcement by the IRS comes as Democratic leaders push to boost taxes on some high earners and use the money to extend the solvency of Medicare.

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