Latest IRS Data Book Shows Audit Rate at 15-year Low

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The IRS audit rate for individuals keeps going down, down, down.

That's what is being told by the IRS, which, on March 29, issued its Data Book for the government’s fiscal year 2017 spanning October 1, 2016 through September 30, 2017 (IR-2018-77, 3/29/18). This annual compilation includes interesting statistics and organizational information relating to taxes and IRS operations. Taxpayers and tax professionals alike often rely on the Data Book for a bird’s eye view of the current tax landscape.

The number that stands out in the FY 2017 Data Book is the 0.6 percent rate for audits of individual tax returns, the lowest recorded rate since 2002.  In other words, the audit rate is only about one in every 160. By way of comparison, the audit rate for 2010 was about 1 percent, or roughly one out of 100. 

The IRS Data Book features a treasure trove of other information if you’re willing to slog through it. (It’s 75 pages long.) Besides the rock-bottom 0.6 percent rate for audits, here are some other interesting tidbits you can find:

  • The IRS audited about 934,000 individual income tax returns in FY 2017 to arrive at the 0.6 percent audit rate. 
  • In FY 2017, the IRS collected more than $3.4 trillion from taxpayers, processed more than 245 million tax returns and other forms and handed out almost $437 billion in tax refunds.
  • IRS levies were down 32 percent from FY 2016. It filed about 5 percent fewer liens than it did in the prior year.
  • The total number of IRS employees at the end of year was 72,803, down 4.5 percent. This reflects a decline of employees in the IRS examinations and collections groups from 32,920 to 31,049 in FY 2017, while the number of tax examiners dropped from 8,588 to 7,936.
  • The amount of business taxes collected was $338.5 billion, a decrease from $345.6 billion in FY 2016. Also, collections of excise taxes, gift taxes and estate and trust income taxes dropped, while payins for individual income taxes, estate taxes and employment taxes went up.
  • More than 55 million taxpayers were assisted through calls or visits to IRS offices.
  • The IRS continued its efforts to combat tax-related identity theft. During FY 2017, 524 criminal investigations were completed.
  • A new feature, a section on taxpayer attitudes, was added to this year’s Data Book. Based on ongoing surveys, 79 percent of all taxpayers were satisfied with their personal interactions with the IRS in FY 2017.
  • Finally, of the taxpayers surveyed, 88 percent said it is not at all acceptable to cheat on their income taxes, while 95 percent believe it is their civic duty to pay their fair share of taxes.

The Data Book also contains other statistics on tax returns, refunds, appeals, taxpayer assistance resources, tax-exempt activities and various IRS activities – just to name a few of the aspects.

About Ken Berry

Ken Berry

Ken Berry, Esq., is a nationally known writer and editor specializing in tax, financial, and legal matters. During his long career, he has served as managing editor of a publisher of content-based marketing tools and vice president of an online continuing education company. As a freelance writer, Ken has authored thousands of articles for a wide variety of newsletters, magazines, and other periodicals.           

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