With the resignation of the acting head of the Internal Revenue Service (IRS) over a series of audits of conservative organizations, the agency is under intense public scrutiny. But this furor ignores little-noticed numbers released last month — they show that the IRS’s audits of wealthy taxpayers revealed massive tax-dodging by the richest Americans.
In 2012, the IRS ramped up its audits of wealthy taxpayers, and shockingly found a massive rate of under-paying taxes. It audited one in eight tax filers with incomes over $1 million, concluding that about 75 percent of these millionaires failed to pay the taxes they owed. Altogether, the agency collected an additional $4.8 billion in taxes from these taxpayers after the audits were conducted.
As the press and politicians look at the IRS’s conduct with regards to auditing political nonprofits, it’s important to remember that these audits can be a powerful tool for making sure that wealthy taxpayers are paying what is legally required of them. If last year’s numbers are any indication, increasing audits of wealthy taxpayers will reveal under-payment and help us raise the money needed to fund the government.