All taxpayers met in person will also have also been contacted multiple times by the IRS, so they should know they have a tax issue, the agency said. However, the timing of most visits will be unannounced.
The increased efforts to reach non-compliant people comes as the agency has come under criticism from its watchdog, the Treasury Inspector General for Tax Administration, and outside groups that say the agency isn’t effectively auditing corporations and high-income individuals with complicated returns. IRS Commissioner Chuck Rettig has said he is focusing on improving enforcement – in both criminal and civil cases – and has asked Congress for more money to staff these efforts.
In the past decade, the number of income tax returns increased by about 9%, but the IRS’s funding and number of employees both declined by more than 20%, according to a January report from the Taxpayer Advocate Service, an independent government office.
The report also found that some taxpayers who are audited or face adverse action from the IRS often cannot reach the agency to resolve the situation. The IRS received 15 million calls on its automated telephone lines in fiscal year 2019. Employees were able to answer only about 31% of those calls, and taxpayers who got through waited on hold for an average of 38 minutes, the Taxpayer Advocate said.
Some tax professionals worry that fewer employees at the agency mean that more taxpayers will try to cheat on their returns. Individuals face a 0.45% chance of being audited, while businesses are audited at a rate of 1.6%, some of the lowest audit figures on record, according to the IRS’s annual report, released in January.
Individual income taxes are the largest group of uncollected taxes before audits, representing about $314 billion, according to agency statistics on the tax gap.
This article was provided by Bloomberg News.