Slowly and quietly over the past eight years, the I.R.S. has been eviscerated. It’s lost tens of thousands of employees. It has fewer auditors now than at any time since 1953. In real dollars, the agency’s budget has dropped by almost $3 billion since 2010.
Businesses and the wealthy benefit the most from this state of affairs. The largest corporations in America used to be audited every year. That started to change when the cuts began, and today, the audit rate has fallen by half. It’s a similar story for individuals making $10 million or more a year: With twice the chance of escaping I.R.S. scrutiny, the ultrarich are much less likely to lose at the game of audit roulette…
The I.R.S. has difficulty tracing the income of the superwealthy or countering their sophisticated arguments about why what appears to be one type of income is actually something else. The agency also has trouble valuing their assets (a problem that, as The Times revealed, dates back at least to when Fred Trump was misleading the I.R.S. about how much his buildings were worth). By the public admission of numerous I.R.S. officials, it has long done a poor job of scrutinizing complicated partnerships to understand who owns what portion of what stock.
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