Innovative Strategies For Winning Tax Controversies, Business Structuring And Estate Planning

IRS Audits and Collections down for 2016-2017

by | Mar 30, 2018 | 941 collection, audits, tax lien

IRS Audits and Collections down for 2016

IRS has issued the 2017 IRS Data Book, its annual publication containing statistical tables and IRS organizational information. One key figure in the Data Book is the rate at which IRS audited returns in 2017 – it dropped to 0.6%, the lowest rate since 2002.

Background. Each year, IRS issues the Data Book, which describes activities from the most-recently ended fiscal year and includes information about tax returns, refunds, examinations and appeals, illustrated with charts showing changes in IRS enforcement activities, taxpayer assistance levels, tax-exempt activities, legal support workload, and IRS budget and workforce levels compared to the previous fiscal year.

Interesting statistics in the 2017 book. Some of the interesting statistics from the 2017 book, which covers IRS activities conducted during the period from Oct. 1, 2016 to Sept. 30, 2017, include:

  • There were fewer audits during fiscal year 2017, as compared to fiscal year 2016. IRS audited almost 934,000 individual income tax returns during the fiscal year, the lowest number of audits since 2003. The chance of being audited fell to 0.6 %, the lowest coverage rate since 2002. Most audits are based on business income. If you file a Schedule C or received S corporation income and receive an audit notice, you need a tax attorney before you meet with the IRS.
  • Several collection actions fell during the fiscal year. IRS levies were down 32% compared to the prior year, and the agency filed about 5% fewer liens than in fiscal year 2016.
  • IRS personnel statistics were down. The total number of IRS employees at the end of fiscal 2017 was 72,803, down 4.5% from the prior year. The number of employees in IRS’s examinations and collections groups fell from 32,920 to 31,049 in 2017, and the number of tax examiners fell from 8,588 to 7,936.
  • The amount of business taxes collected in fiscal year was $338.5 billion, down from $345.6 billion in fiscal year 2016. There were also decreases in the amount of excise taxes, gift taxes, and estate and trust income taxes collected. There were increases in the amounts of individual income taxes, estate taxes and employment taxes collected.