The IRS workforce has shrunk by 25,000 employees, and taxpayers are noticing. Tax lawyers say a dangerous mentality is building: “There’s seemingly this mentality building which is, ‘The IRS isn’t going to catch me,’” said Carolyn Schenck, a former IRS national fraud counsel, told the Wall Street Journal. Audits of people with at least $10 million in income dropped 39% this year.
The cutbacks cost the government. The workforce reductions would cut $46 billion in federal spending over the next decade but reduce revenue collections by $643 billion, according to The Budget Lab at Yale. Enforcement spending is at its lowest level in at least 20 years.
But business owners stand to benefit most. They can underreport cash income or inflate expenses more easily than wage earners. “Roll the dice. Put an extra zero here,” said David Carrone, a retired revenue agent. Before you take that advice, remember: the government can audit returns up to three years after filing.
The IRS workforce has shrunk by 25,000 employees, and taxpayers are noticing. Tax lawyers say a dangerous mentality is building: “There’s seemingly this mentality building which is, ‘The IRS isn’t going to catch me,’” said Carolyn Schenck, a former IRS national fraud counsel, told the Wall Street Journal. Audits of people with at least $10 million in income dropped 39% this year.
The cutbacks cost the government. The workforce reductions would cut $46 billion in federal spending over the next decade but reduce revenue collections by $643 billion, according to The Budget Lab at Yale. Enforcement spending is at its lowest level in at least 20 years.
But business owners stand to benefit most. They can underreport cash income or inflate expenses more easily than wage earners. “Roll the dice. Put an extra zero here,” said David Carrone, a retired revenue agent. Before you take that advice, remember: the government can audit returns up to three years after filing.
