In May 2024, the Internal Revenue Service (IRS) announced in its Strategic Operating Plan report that it plans to increase audit focus on the wealthiest taxpayers in the United States. The federal agency anticipates expanding audits on “the wealthiest taxpayers, large corporations, and large, complex partnerships” for tax year 2026.
Increased Focus on Audits Looms
“The IRS will increase audit rates by more than 50% on wealthy individual taxpayers with total positive income over $10 million, with audit rates going from an 11% coverage rate in 2019 to 16.5% in tax year 2026,” the agency revealed on May 2.
However, the same announcement noted that the IRS does NOT plan to “increase audit rates for small businesses and taxpayers making under $400,000.”
“We need to continue working to make more improvements in taxpayer service, modernize technology, and ensure those with complex returns, including certain high-income individuals, large corporations, and complex partnerships, pay the taxes they owe,” IRS Commissioner Danny Werfel said.
So, what does this mean if you’re a wealthier taxpayer? Hopefully, nothing, if your taxes have been accurate and in compliance with the IRS each tax year.
But for some, it could mean paying additional taxes following an audit from the IRS. According to CNBC, in fiscal 2023, the IRS closed almost 583,000 tax return audits, which resulted in $31.9 billion in recommended additional tax.
Thanks to new funding directed by the Inflation Reduction Act (IRA), the IRS is looking to improve taxpayer service and take steps to “add fairness to tax compliance.” These audits are just a part of the agency’s overall plan to do just that.
However, Werfel reassured, “There is no new wave of audits coming from middle- and low-income [individuals], coming from mom and pops. That’s not in our plans,” according to CBS News.
IRS Audit Representation
If you do find yourself caught up in an audit due to the IRS’ increased focus on audits for the wealthiest taxpayers, Dayes Law Firm may be able to help.
In the event of an IRS audit or inquiry, our experienced team of lawyers and tax attorneys can offer thorough audit support to guide you through the audit process and will advocate for you and represent your interests effectively. We have hundreds of reviews from satisfied clients to back up our reputation and are known throughout the Phoenix, Arizona community for our comprehensive IRS audit assistance, tax planning, and compliance services.
Please contact Dayes Law Firm at (800) 503-2000 to learn more today. Our team offers a free, no-obligation consultation to discuss your circumstances and to determine which of our services may be right for you. Call now to find out more!