An analysis by Syracuse University’s Transactional Records Access Clearinghouse (TRAC) found that low-income wage earners with less than $25,000 in total earnings were audited at a rate five times higher than everyone else in fiscal year 2021. The reason? IRS has put an emphasis on auditing beneficiaries of the Earned Income Tax Credit, which is used predominantly by poor and working-class families.
The GAO also reported in May that while audit rates have been falling in recent years in all income levels, they dropped the most for taxpayers with incomes of $200,000 or more. “Audit rates decreased more for higher-income taxpayers,” GAO told Congress, blaming the complexity of finances and legal and accounting resources of wealthy Americans for the drop.