The reason for the drop, Koskinen noted, was “a decline in the number of returns audited. The I.R.S. audited the returns of approximately 1.4 million individuals in FY 2013, down 5 percent from FY 2012 and the lowest level since 1.39 million audits in FY 2008. The audit coverage rate – the number of audits divided by the number of tax returns – fell below 1 percent to 0.96 percent in FY 2013, the lowest level since FY 2006.”
Koskinen observed that cuts in agency funding have reduced audits of corporations and of wealthy citizens: “Audits of high-income individuals – defined as those with $1 million or more in income – fell 3.7 percent as well last year. The I.R.S. examined approximately 61,000 business returns in FY 2013, down 13 percent from FY 2012.”
Republicans are aware of what happens to tax collections from the rich when the I.R.S. budget is cut and seem happy to live with those consequences.
The continuing effort of House Republicans to characterize the IRS-Tea Party debacle as an example of a Democratic administration harassing conservative independent expenditure groups ignores the genuinely deleterious effects of slashing the federal tax collection budget.